Coronavirus Business Support

Business Rates Grants 2020 to 2021

The government has announced a set of measures to provide support to businesses that experience increased costs or disruptions to their cash flow as a result of COVID-19. Information on those measures can found on the Gov.uk website

The Council have now paid out over £36.2 million to 2,972 local businesses in the form of small business and retail, hospitality & leisure grants. 

To apply for the latest lockdown grants, there are two separate forms. One is for businesses which are closed or which have had to close a substantial part of their service due to the lockdown and one is sector specific and aimed at nightclubs, dance halls, discotheques, sexual entertainment venues and hostess bars. Please read the criteria for application below carefully before applying. 

Before starting the application process, please ensure you have read through the eligibility criteria below and have the following information to hand:

  • Business Rates Account Number
  • Company Number
  • VAT Registration Number
  • Date your business commenced trading at your address
  • Bank details (Account name, sort code and account number)

Local Restrictions Support Grant – 5 November 2020 to 2 December 2020

When national restrictions are imposed by Central Government, a significant number of businesses will be mandated to close to manage the spread of coronavirus.

Localised restrictions are legally binding restrictions imposed on specific Local Authority areas or multiple Local Authority areas, where the Secretary of State for Health and Social Care requires the closure of businesses in a local area under regulations made using powers in Part 2A of the Public Health (Control of Disease) Act 1984 in response to the threat posed by coronavirus and commonly as part of a wider set of measures.r

How much funding will be provided to businesses?

  • Businesses occupying hereditaments 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 £1,334 per 28-day qualifying restriction period. 
  • Businesses occupying hereditaments appearing on the local rating list with a rateable value over £15,000 (£15,001) and less than £51,000 (£50,999) on the date of the commencement of the widespread national restrictions will receive a payment of £2,000 per 28-day qualifying restriction period. 
  • Businesses occupying hereditaments 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 £3,000 per 28-day qualifying restriction period.

This funding will be provided on a rolling 28-day basis for as long as national restrictions apply.

Any changes to the rating list (rateable value or to the hereditament) after the first full day of localised restrictions and business closures regulations came into force including changes which have been backdated to this date, should be ignored for the purposes of eligibility.

Eligibility

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. Please refer to this page for a full list of these businesses: New National Restrictions from 5 November

Any business that is required to close the part of its business that provides its main service is eligible for a Closed Grant. This is the case even if the business adapts its business model to provide a reduced service, such as takeaways. The council will use their discretion and local knowledge to make a judgement regarding which element of the business is the substantive element of the business.

Subject to State aid limits, businesses will be entitled to receive a grant for each eligible hereditament within the restriction area. So, some businesses may receive more than one grant where they have more than one eligible hereditament.

Businesses must be closed for the entirety of the 28-day payment cycle to be eligible.

Who will receive this funding?

The person who according to the billing authority’s records was the ratepayer in respect of the hereditament on the date of the first full day of local restrictions is eligible for the grant.

Businesses will need to notify their Local Authority if they no longer meet the eligibility criteria for additional grants at any point in any local restrictions period. For example, if they become insolvent.

Will this grant schemes be subject to tax?

Grant income received by a business is taxable. The Local Restrictions Support 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.

Exclusions

  • 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). 
  • 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. 
  • Businesses in areas outside the scope of the localised restrictions, as defined by Government, are also excluded.
  • Businesses that have chosen to close but not been required to will not be eligible for this grant.
  • 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.
  • For the avoidance of doubt, businesses that were in administration, are insolvent or where a striking-off notice has been made are not eligible for funding under this scheme. 

State Aid

The United Kingdom left the EU on 31 January 2020, nonetheless under the Withdrawal Agreement the State aid rules continue to apply during a transition period, subject to regulation by the EU Commission. The Local Authority must be satisfied that all State aid requirements have been fully met and complied with when making grant payments, including, where required, compliance with all relevant conditions of the EU State aid De-Minimis Regulation, the EU Commission Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak, the approved Covid-19 Temporary Framework for UK Authorities, and any relevant reporting requirements to the EU Commission. 

Payments made can be provided under the existing De Minimis rules, to any one organisation over a three fiscal year period, provided doing so does not 13 exceed the €200,000 threshold. Payments made where the De Minimis threshold has been reached should be paid under the Covid-19 Temporary Framework for UK Authorities (threshold €800,000). Further information on State Aid law can be found at State Aid Guidance

Where the Local Authority has reason to believe that the information that they hold about the ratepayer on the 5 November is inaccurate they may withhold or recover the grant and take reasonable steps to identify the correct ratepayer. Local Authorities should make clear to the recipients that the grant is for the ratepayer and may be liable for recovery if the recipient was not the ratepayer on the eligible day. 

The Local Authority write to the business, stating that by accepting the grant payment, the business confirms that they are eligible for the grant schemes. This includes where Local Authorities already have bank details for businesses. 

Any changes to the rating list (rateable value or to the hereditament) after the 5 November 2020 including changes which have been backdated to this date should be ignored for the purpose of eligibility. 

Central Government guidance deems that an application form is required to be submitted for this grant, as a State Aid Declaration is required and Bank Details must be verified, however this time a simpler form is required. The form to apply for this grant can be found here: Local Restrictions Support Grant (Closed)

Local Restrictions Support Grant (Sector)

On Friday 9 October, the Government announced further funding to support businesses that have been required to close on a national basis since 23 March 2020 due to restrictions being put in place to manage coronavirus and save lives.

How much funding will be provided to businesses?

Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £15,000 or under on the date of the commencement of the national restrictions will receive a payment of £667 per 14-day qualifying restriction period. 

Businesses occupying hereditaments 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 national restrictions will receive a payment of £1,000 per 14-day qualifying restriction period. 

Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £51,000 or above on the commencement date of the national restrictions will receive a payment of £1,500 per 14-day qualifying restriction period.

Payments will be made for each 14-day period of closure from 1 November 2020 and will not be backdated. In accordance with this timeline, Local Authorities are encouraged to make payments to eligible businesses every 14 days. 

Any changes to the rating list (rateable value or to the hereditament) after the first full day of localised restrictions and business closures regulations came into force including changes which have been backdated to this date, should be ignored for the purposes of eligibility.

Eligibility

Businesses that have been required to close due to national restrictions imposed on 23 March 2020 and which have not been able to re-open as a result of regulations made under the Public Health (Control of Disease) Act 1984 will be eligible to receive grant funding.

Eligible businesses are: 

  1. Nightclubs, dance halls, and discotheques
  2. Sexual entertainment venues and hostess bars

Businesses must have been trading on 23 March 2020 to be eligible to receive a grant payment. If new national closures of business property types are announced, then the business must have been trading on the date of the announced closure in order to be eligible.

Subject to State aid limits, businesses will be entitled to receive a grant for each eligible hereditament per 14-day period of national restrictions that require them to close from 1 November 2020. 

Some businesses may receive more than one grant where they have more than one eligible hereditament.

Who will receive this funding?

The person who, according to the billing authority’s records, was the ratepayer in respect of the hereditament on the 1 November 2020 is eligible for the grant. Businesses will need to notify their Local Authority if they no longer meet the eligibility criteria for additional grants.

Will this grant schemes be subject to tax?

Grant income received by a business is taxable. The Local Restrictions Support 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.

Exclusions

  • Businesses that 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.
  • For the avoidance of doubt, businesses that were in administration, are insolvent or where a striking-off notice has been made are not eligible for funding under this scheme
  • Businesses listed above under Eligibility will not be eligible if they have re-purposed their business and as a result been able to open, for example changing their business from a nightclub to a bar.

In the event of renewed widespread national ‘lockdown’ restrictions being imposed, the Local Restrictions Support Grant (Sector) will cease to apply, as relevant businesses will receive funding from the LRSG (Closed), subject to adaptations. Please see published LRSG (Closed) addendums where relevant.

State Aid

The United Kingdom left the EU on 31 January 2020, nonetheless under the Withdrawal Agreement the State aid rules continue to apply during a transition period, subject to regulation by the EU Commission. The Local Authority must be satisfied that all State aid requirements have been fully met and complied with when making grant payments, including, where required, compliance with all relevant conditions of the EU State aid De-Minimis Regulation, the EU Commission Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak, the approved Covid-19 Temporary Framework for UK Authorities, and any relevant reporting requirements to the EU Commission. 

Payments made can be provided under the existing De Minimis rules, to any one organisation over a three fiscal year period, provided doing so does not 13 exceed the €200,000 threshold. Payments made where the De Minimis threshold has been reached should be paid under the Covid-19 Temporary Framework for UK Authorities (threshold €800,000). Further information on State Aid law can be found at State Aid Guidance

Central Government guidance deems that an application form is required to be submitted for this grant, as a State Aid Declaration is required and Bank Details must be verified, however this time a simpler form is required. The form to apply for this grant can be found here: Local Restrictions Support Grant (Sector)

Additional Restriction Grant

On 31 October 2020, the Government announced the introduction of additional support for Local Authorities under national and Local Covid Alert Level 3 restrictions. This support will take the form of a funding scheme in Financial Year 2020- 2021 and can be used across Financial Years 20/21 and 21/22.

Under the Additional Restrictions Grant, Local Authorities will receive a one-off lump sum payment amounting to £20 per head in each eligible Local Authority when LCAL 3 or widespread national restrictions are imposed. Local authorities can use this funding for business support activities. We envisage this will primarily take the form of discretionary grants, but LAs could also use this funding for wider business support activities.

We will be hoping to support businesses that we have been unable to support previously and will be meeting and working with business groups and forums across the borough to support as many businesses as possible.

Further details will be made available once these consultations have been completed and a policy agreed.

Administration of Local Restrictions Support Grants

Where the Local Authority has reason to believe that the information that they hold about the ratepayer is inaccurate they may withhold or recover the grant and take reasonable steps to identify the correct ratepayer. Local Authorities should make clear to the recipients that the grant is for the ratepayer and may be liable for recovery if the recipient was not the ratepayer on the eligible day. 

The Local Authority write to the business, stating that by accepting the grant payment, the business confirms that they are eligible for the grant schemes. This includes where Local Authorities already have bank details for businesses. 

Any changes to the rating list (rateable value or to the hereditament) after the 5 November 2020 including changes which have been backdated to this date should be ignored for the purpose of eligibility. 

For further information on help available to businesses please go to Coronavirus Business Support. This page is updated as and when new information is provided.
 

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