A bed and breakfast owner has made a plea for a rule change around a recent tranche of support for small businesses, saying many will go under if the Government does not revise its criteria.

On May 2 the Government announced its ‘top up to local business grants funds scheme’, aimed at giving grants of up to £25,000 to businesses that missed out on other support.

Although many businesses have already benefited from the Government’s Small Business Grant Fund and the Retail, Hospitality and Leisure Grant Fund, these were only available for those paying business rates.

Like many other bed and breakfast owners, Tracy Wilson does not pay business rates for her Low Plain Farm accommodation in Brigsteer but simply pays council tax in the same way as any other residential property.

However, Tracy says she is still missing out on the top up grants as she is also self-employed and the Government’s guidance says those who claim self-employed income support are not eligible.

“The whole thing has just been absolutely terrible,” said Tracy, who says her business has had no income since the beginning of March and has lost thousands of pounds worth of bookings.

“I am waiting to see if (chancellor) Rishi Sunak and the business secretary (Alok Sharma) will change the wording so people can claim,” she said.

Tracy said she had been in touch with other bed and breakfasts across Cumbria and the country which were in a similar position and desperate for the rules to change.

“We are going to lose our homes and lose our businesses because we won’t be able to pay the mortgage,” she said.

“It’s actually heartbreaking for me.

“I haven’t met one person who is actually entitled to this second grant.”

As with the business grants announced earlier in the year, the top-up scheme is being administered by local councils.

The Government’s website says it is asking “local authorities to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for small business rates relief, and bed and breakfasts that pay council tax rather than business rates.”

However it adds: “Local authorities may choose to make payments to other businesses based on local economic need.

“The allocation of funding will be at the discretion of local authorities.”

Eligible businesses must have under 50 employees and be able to demonstrate that they have seen a significant drop of income due to coronavirus restriction measures.

Westmorland and Lonsdale MP Tim Farron has taken up the case of businesses that are missing out on the top-up scheme.

In an open letter to business secretary Alok Sharma he wrote: “I understand the department has made clear to South Lakeland District Council that any business eligible for the Self-Employed Income Support Scheme will not be eligible for a grant under the top-up scheme.

“Crucially it is clear from the council, from Cumbria Tourism and from constituents contacting me directly that virtually every small B&B owner takes their income as self-employment income. “Much the same is true for those businesses run from shared spaces.”

He said it was unfair that businesses paying rates could also claim self-employed income support while those paying council tax only got one form of support and did not get their council tax waived, as has been the case with many other rate paying businesses.

He said councils needed to be given greater freedom to allocate the grants to those paying council tax and receiving self-employed support.

He said: “Small businesses that have been falling through the gaps should not now be denied the ability to claim for the very grant that was set up for them.

“We are not calling for extra money - just a flick of a pen is all it would take for us to save many small businesses from going to the wall.”