As part of its response to COVID-19 and the business financial support package, the government has made different types of grant funding available to businesses.
This page provides information on the:
The Small Business Grant Fund, the Retail, Hospitality and Leisure Grants and Local Authority Discretionary Grants which ran through the initial lockdown period have now largely expired.
Closed business lockdown payments for retail, hospitality and leisure
One-off payments will be available to closed retail, hospitality and leisure businesses required to close from 5 January 2021. It is provided on a ’per property’ basis meaning that the owner of multiple properties of this description may be eligible for multiple grants. They are available in addition to existing support grants such as those listed below which are operational during periods of national lockdown such as the LRSG (Closed) and the ARG (see below).
Businesses which have been required to close their main, in-person service but adapts to operate a takeaway, click and collect or online with delivery will be considered eligible.
There will also be £594 million discretionary fund available for Local Authorities to support other types of impacted businesses which are ineligible for the top up grant.
The levels of support are:
- £4,000 for businesses with a rateable value of £15,000 or under
- £6,000 for businesses with a rateable value between £15,000 and £51,000
- £9,000 for businesses with a rateable value of over £51,000.
The scheme will close for applications on 31 March 2021 and is accessible via local authorities. It is up to local authorities to decide whether or not they open an application for this funding or whether they base it on their records of businesses having previous support funding.
Due to the introduction of national lockdown restrictions on businesses, these grants will cease to apply. Businesses may receive grant funding under either the Local Restrictions Support Grant (Closed) or the Additional Restrictions Grant Schemes detailed below.
Local Restrictions Support Grants (Closed)
This grant funding is for supporting businesses which have legally been required to close due to local restrictions being put in place.
Funding under this grant scheme was on a 14 day payment cycle to an alternative payment cycle but for 5 November – 2 December a 28-day payment cycle will be applied. During periods of national lockdown, the 28 day cycle also applies.
Businesses that are eligible are those that have been mandated to close by government and include non-essential retail, leisure, personal care, sports facilities and hospitality businesses. Business must have been open as usual and providing in-person services from their business premises but then required to close. It can also include business that operate primarily as an in-person venue, such as pubs and restaurants, but are providing a takeaway service instead.
Levels of funding:
a) Businesses occupying properties appearing on the local rating list with a rateable value of exactly £15,000 or under on the date of the commencement of the widespread national restrictions will receive a payment of £2,001 per 42-day qualifying restriction period.
b) Businesses occupying properties appearing on the local rating list with a rateable value over £15,000 and less than £51,000 on the date of the commencement of the widespread national restrictions will receive a payment of £3,000 per 42-day qualifying restriction period.
c) Businesses occupying properties appearing on the local rating list with a rateable value of exactly £51,000 or above on the commencement date of the widespread national restrictions, will receive £4,500 per 542-day qualifying restriction period.
Subject to State aid limits, businesses will be entitled to receive a grant for each eligible property within the restriction area. So, some businesses may receive more than one grant where they have more than one eligible property.
Local Authorities should pay businesses the full 42 day amount as soon as possible.
Exclusions to LRSG
a) Businesses that are able to continue to trade because they do not depend on providing direct in-person services from premises and can operate their services effectively remotely (e.g. accountants, solicitors).
b) Businesses subject to local restrictions that are implemented for less than 14 days and businesses that are closed for less than 14 days are not eligible for grant funding.
c) Businesses that have chosen to close but not been required to will not be eligible for this grant.
d) Businesses which have already received grant payments that equal the maximum levels of State aid permitted under the de minimis and the COVID-19 Temporary State Aid Framework.
Additional Restrictions Grant Funding (ARG)
On 31 October 2020, the government announced the introduction of additional support for Local Authorities under national and Local COVID Alert Level 3 restrictions. The government expects the majority of this funding to be used for direct business support grants.
Which types of business will be eligible and how much funding will be provided?
Businesses must have been trading on the first full day of national or LCAL 3 restrictions to be eligible to receive a grant support.
Local Authorities can determine how much funding to provide to businesses from the ARG funding provided, and exactly which businesses to target. Local Authorities have been encouraged by the government to develop discretionary grant schemes to help those businesses which, while not legally forced to close, are nonetheless severely impacted by the restrictions put in place to control the spread of COVID-19. This could include businesses which supply the retail, hospitality, and leisure sectors, or businesses in the events sector.
Local Authorities may also choose to help businesses outside the business rates system, which are effectively forced to close, for example market traders.
Finally, Local Authorities could use ARG funding to provide additional support to larger local businesses which are important to the local economy, on top of the funding provided to those businesses via the LRSG (Closed) scheme, with due reference to State Aid. In taking decisions on the appropriate level of grant, Local Authorities may want to take into account the level of fixed costs faced by the business in question, the number of employees, whether they are unable to trade online and the consequent scale of coronavirus losses.
The grant amounts given to individual businesses will be subject to state aid limits.
Will these grant schemes be subject to tax?
Grant income received by a business is taxable. The Local Restrictions Support Grant and the Additional Restrictions Grant will need to be included as income in the tax return of the business. Only businesses which make an overall profit once grant income is included will be subject to tax.
The Local Restrictions Support Grant counts towards state aid.
Payments count towards the total de minimis State aid you’re allowed to get over a 3-year period - €200,000. If you have reached that threshold, you may still be eligible for funding under the COVID-19 Temporary Framework. The limit for the framework is €800,000.
Your local council will ask you to complete a declaration confirming that:
- You will not exceed the relevant state aid threshold
- You were not an ‘undertaking in difficulty’ on 31 December 2019. This applies only to the COVID-19 Temporary Framework
The undertaking in difficulty test does not apply to small and micro undertakings (less than 50 employees and less than EUR 10 million of annual turnover and/or annual balance sheet) unless they were already in insolvency.
Self-Employment Income Support Scheme (SEISS) - updated 2 November 2020
The government has announced to reflect the recent changes to the furlough scheme, the UK-wide Self-Employment Income Support Scheme (SEISS) will be made more generous – with self-employed individuals receiving 80% of their average trading profits for November.
And to ensure those who need support get it as soon as possible, payments will also be made more quickly with the claims window being brought forward from 14 December to 30 November. The changes will ensure that self-employed individuals who temporarily cannot carry out their business or have suffered reduced demand due to the outbreak are supported over winter.
In addition, more businesses will be able to access additional support as deadlines for applications for government-backed loan schemes and the Future Fund have been further extended until 31 January 2021.
As SEISS grants are calculated over three months, the uplift for November to 80 per cent, along with the 40 per cent level of trading profits for December and January, increases the total level of the third grant to 55 per cent of trading profits. The maximum grant will increase to £5,160.
This provides broadly equivalent support to the self-employed as is being provided to employees through the government contribution in the Coronavirus Job Retention Scheme in November and then the Job Support Scheme in the two subsequent months.
To be eligible for the Grant Extension, self-employed individuals, including members of partnerships, must:
- Have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
- Declare that they intend to continue to trade and either:
- Are currently actively trading but are impacted by reduced demand due to coronavirus
- Were previously trading but are temporarily unable to do so due to coronavirus
This follows the CJRS being extended until December. This provides broadly equivalent support to the self-employed as is being provided to employees through the government contribution in the Coronavirus Job Retention Scheme in November and then the Job Support Scheme in the two subsequent months.
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