Call for Wales to lead the way in closing coronavirus grants loophole affecting small businesses in serviced offices

John Webber, Head of Rating, Colliers International. Copyright Nick Cunard / NCSM Media.

The Welsh Government has been called on to lead the way in closing a loophole which means thousands of businesses in serviced offices risk losing out on grants aimed at providing support during the coronavirus crisis.

John Webber, Head of Rating at commercial property advisors Colliers International, has written to Rebecca Evans, Minister for Finance and Trefnydd, asking for action to be taken to help businesses in Wales which risk losing out because UK Government support is assessed using business rates, and companies which rent space in serviced offices pay an all-inclusive fee.

The issue particularly affects small businesses in Cardiff, where there are a large number of serviced office providers including Indycube, Tramshed Tech, Creative Quarter, Rombourne, IWG and BizSpace. A total of 21,419 sq ft of space was let to flexible workspace providers in the first six months of last year.

“We believe this issue affects hundreds of small businesses based in serviced offices in Wales, especially in Cardiff, and around 10,000 in the UK as a whole. They are missing out on at least £100 million of vital support purely because of the way they pay their rates bills,” said Mr Webber.

“The Government in Westminster does not appear to appreciate the need to tackle this situation urgently, and my hope is that the Welsh Government can lead the way by addressing this iniquity in a timely manner.

In his letter to Ms Evans, Mr Webber explained that a cash grant of £10,000 is available for small businesses in Wales with a Rateable Value of £12,000 and under. However, many businesses that rent space in serviced offices provided by operators do not have individual business rates assessments, as they pay a fixed all-inclusive monthly service agreement to their office provider to cover rent, rates, service charges.

He wrote: “We therefore request some flexibility in the approach to such businesses who have fallen through the cracks and that you would inform the Billing Authorities who are handling the grants that such small businesses are an exceptional case.”

The business rates team at Colliers International looks after 90 per cent of the serviced office market, and Mr Webber offered to provide an illustration on a building by building basis of which businesses should be eligible for the grants at no cost to the Government or to the individual occupiers.

He said: “We at Colliers will do everything in our power to make sure both our clients and their tenants are looked after and this issue is resolved as quickly as possible.

“Obviously small businesses are the lifeblood of the economy and in these difficult times, many are struggling to stay solvent. Without the grants on offer, even more will go under.”

The call by Colliers is being supported by Richard Morris, UK CEO of IWG, the world’s largest flexible workspace operator. He said: “Some of our small business customers have told us that they are struggling to claim their grants, and we want to help. We support Colliers’ proposal to the Treasury to help identify those companies who have so far fallen through the gap and ensure they receive this vital support.”