Restart Grant - 1 April 2021
On 3 March 2021, Government announced the introduction of grant support for non-essential retail, hospitality, accommodation, leisure, personal care, and gym businesses in England. This support will take the form of a one-off grant funding scheme in Financial Year 2021-2022 to support businesses in their local economies as coronavirus restrictions are eased across the country.
This scheme will close for applications on 30 June 2021 and final payments must be made by 31 July 2021.
How much funding will be provided to businesses?
The Restart Grant scheme is for businesses on the ratings list only and is a one-off grant.
The Restart Grant will support non-essential retail premises with one-off grants of up to £6,000 in Strand One of the Restart Grant. The following thresholds apply for these businesses:
- Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £15,000 or under on 1 April 2021 will receive a payment of £2,667.
- Businesses occupying hereditaments appearing on the local rating list with a rateable value over £15,000 and less than £51,000 on 1 April 2021 will receive a payment of £4,000.
- Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £51,000 or over on 1 April 2021 will receive a payment of £6,000.
The Restart Grant will also support hospitality, accommodation, leisure, personal care, and gym business premises with one-off grants of up to £18,000 in Strand Two of the Restart Grant. The following thresholds apply for these businesses:
- Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £15,000 or under on 1 April 2021 will receive a payment of £8,000.
- Businesses occupying hereditaments appearing on the local rating list with a rateable value over £15,000 and less than £51,000 on 1 April 2021 will receive a payment of £12,000.
- Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £51,000 or over on 1 April 2021 will receive a payment of £18,000.
Any changes to the rating list (rateable value or to the hereditament) after 1 April 2021 should be ignored for the purposes of eligibility. Local Authorities are not required to adjust, pay, or recover grants where the rating list is subsequently amended retrospectively to 1 April 2021.
Businesses must have been trading on 1 April 2021 to be eligible to receive funding under this scheme.
For the purposes of this grant scheme, a business is considered to be trading if it is engaged in business activity. This should be interpreted as carrying on a trade or profession or buying and selling goods or services in order to generate turnover.
To help further, some trading indicators are included below that can help assess what can be defined as trading for the purposes of the grant schemes. Indicators that a business is trading are:
• The business has staff on furlough
• The business continues to trade online, via click and collect services etc.
• The business is not in liquidation, dissolved, struck off or subject to a striking of notice or under notice
• The business is engaged in business activity; managing accounts, preparing for reopening, planning, and implementing COVID-safe measures
Strand One: up to £6,000 per hereditament
Please see the text at the bottom of this page for a Business categorisation for the purposes of grant funding thresholds.
For the purposes of this scheme, a non-essential retail business can be defined as a business that is used mainly or wholly for the purposes of retail sale or hire of goods or services by the public, where the primary purpose of products or services provided are not necessary to the health and well-being of the public.
Local Authorities may use the following criteria to assess whether a business is eligible for a grant under this threshold:
• Businesses offering in-person non-essential retail to the general public.
• Businesses that were likely to have been required to cease their retail operation in the January 2021 lockdown.
• Businesses that had retail services restricted during January lockdown.
• Businesses that sell directly to consumers.
Strand Two: up to £18,000 per hereditament
Please see the text at the bottom of this page for a Business categorisation for the purposes of grant funding thresholds.
Hospitality For the purposes of this scheme, a hospitality business can be defined as a business whose main function is to provide a venue for the consumption and sale of food and drink.
Leisure For the purposes of this scheme, a leisure business can be defined as a business that provides opportunities, experiences, and facilities, in particular for culture, recreation, entertainment, celebratory events and days and nights out.
Accommodation For the purposes of this scheme, an accommodation business can be defined as a business whose main lodging provision is used for holiday, travel, and other purposes.
Gym & sports For the purposes of this scheme, a gym & sport business can be defined as a commercial or non-profit establishment where physical exercise or training is conducted on an individual basis or group basis, using exercise equipment or open floor space with or without instruction, or where individual and group sporting, athletic and physical activities are participated in competitively or recreationally.
Personal care For the purposes of this scheme, a personal care business can be defined as a business which provides a service, treatment, or activity for the purposes of personal beauty, hair, grooming, body care and aesthetics, and wellbeing.
Subject to subsidy allowance conditions, businesses will be entitled to receive a grant for each eligible hereditament. So, some businesses may receive more than one grant where they have more than one eligible hereditament.
Who will receive this funding?
The business that according to the billing authority’s records was the ratepayer in respect of the hereditament on 1 April 2021 is eligible to receive the grant.
Local Authorities will be responsible for determining whether businesses are entitled to a grant under the non-essential retail thresholds, or under the hospitality, accommodation, leisure, personal care, and gym business thresholds.
The primary principle of the Restart Grant scheme is to support businesses that offer in-person services, where the main service and activity takes place in a fixed rate-paying premises, in the relevant sectors.
If a business operates services that could be considered non-essential and also fall into another category, such as hospitality in the higher funding threshold, the main service can be determined by assessing which category constitutes 50% or more of their overall business. The main service principle will determine which threshold of funding a business receives. Businesses will need to declare which is their main service. It is understood that in some cases it may not be materially clear whether a business falls into one of the categories, so decisions on the eligibility of these businesses will be at the Local Authorities discretion.
Businesses will need to notify their Local Authority if they no longer meet the eligibility criteria for additional grants at any point. For example, if they become insolvent.
Will this grant scheme be subject to tax?
Grant income received by a business is taxable. The Restart 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.
Payments made to businesses before 5 April 2021 will fall into the 2020/21 tax year. Payments after 6 April 2021 will fall into the 2021/22 tax year. Unincorporated businesses will be taxed when they receive the grant income.
- Businesses that are not within the ratings system will not be eligible to receive funding under this scheme.
- Businesses that have already received grant payments that equal the maximum permitted subsidy allowances will not be eligible to receive funding.
- Businesses that are in administration, insolvent, in liquidation, dissolved, struck off or subject to a striking-off notice are not eligible under this scheme.
COVID-19 business grant subsidy allowance
The EU State aid rules no longer apply to subsidies granted in the UK following the end of the transition period, which ended on 31 December 2020.
On Thursday 4 March new subsidy allowances were established for the COVID19 business grants schemes, on the basis of the principles set out in Article 3.4 of the Trade and Cooperation Agreement (TCA).
There are three subsidy allowances for this scheme set out below:
Small Amounts of Financial Assistance Allowance
Grants may be paid in accordance with Article 3.2(4) of the TCA, which enables an applicant to receive up to a maximum level of subsidy without engaging Chapter 3 of the TCA. This allowance is 325,000 Special Drawing Rights, to a single economic actor over any period of three fiscal years, which is the equivalent of £335,000 as at 2 March 2021. An applicant may elect not to receive grants under the Small Amounts of Financial Assistance Allowance and instead receive grants only using the below allowances available under this scheme.
COVID-19 Business Grant Allowance
Where the Small Amounts of Financial Assistance Allowance has been reached, grants may be paid in compliance with the Principles set out in Article 3.4 of the TCA and in compliance with Article 3.2(3) of the TCA under the COVID-19 Business Grant Allowance (subsidies granted on a temporary basis to respond to a national or global economic emergency). For the purposes of these scheme rules, this allowance is £1,600,000 per single economic actor. This allowance includes any grants previously received under the COVID-19 business grant schemes and any State aid previously received under Section 3.1 of the European Commission’s Temporary Framework across any other UK scheme. This may be combined with the Small Amounts of Financial Assistance Allowance to equal £1,935,000 (subject to the exact amount applicable under the Small Amounts of Financial Assistance Allowance using the Special Drawing Right calculator).
COVID-19 Business Grant Special Allowance
Where an applicant has reached its limit under the Small Amounts of Financial Assistance Allowance and COVID-19 Business Grant Allowance, it may be able to access a further allowance of funding under these scheme rules of up to £9,000,000 per single economic actor, provided the following conditions are met:
a. The Special Allowance covers only the applicant’s uncovered fixed costs incurred during the period between 1 March 2020 and 31 March 2022, including such costs incurred in any part of that period (‘eligible period’);
b. Applicants must demonstrate a decline in turnover during the eligible period of at least 30% compared to the same period in 2019. The calculation of losses will be based on audited accounts or official statutory accounts filed at Companies House, or approved accounts submitted to HMRC which includes information on the applicant’s profit and loss;
c. ‘Uncovered fixed costs’ means fixed costs not otherwise covered by profit, insurance or other subsidies;
d. The grant payment must not exceed 70% of the applicant’s uncovered fixed costs, except for micro and small enterprises (for the purposes of this scheme defined as less than 50 employees and less than £9,000,000 of annual turnover and/or annual balance sheet), where the grant payment must not exceed 90% of the uncovered fixed costs;
e. Grant payments under this allowance must not exceed £9,000,000 per single economic actor. This allowance includes any grants previously received in accordance with Section 3.12 of the European Commission’s Temporary Framework; all figures used must be gross, that is, before any deduction of tax or other charge;
f. Grants provided under this allowance shall not be cumulated with other subsidies for the same costs.
An applicant must be able to provide the necessary documentation to demonstrate it is eligible for funding under this COVID-19 Business Grant Special Allowance.
Business categorisation for the purposes of Re-start grant funding thresholds
Threshold definitions for the purposes of this scheme are restated below:
Non-essential retail definition: a business that is open to the public and is used mainly or wholly for the purposes of retail sale or hire of goods or services, where the primary purpose of products or services provided are not necessary to the health and well-being of the public.
Types of businesses - Non-essential retail (up to £6,000)
Betting offices, Departmental stores, Markets (other than livestock), Sales kiosks, Showrooms, e.g. kitchen, bathroom, tile, glazing, Tobacco and vape stores, Antiques stores, Sales offices, Travel agents, Electronic goods and mobile phone shops, Clothes shops, Book shops, Auction rooms, Car auction, Car showrooms, Car supermarkets, Car washes (standalone), Car/caravan, Sales/display/hiring Sites, Charity shops, Carpet stores, Furniture shops, Sofa shops, Homeware shops, Florists, Plant nurseries, Jewellers, Stationery shops, Gift shops, Make-up shops, Animal groomers, Sweet shops, Photography studios.
For these purposes, the definition of a non-essential retail business should exclude: food retailers, including food markets, supermarkets, convenience stores, corners shops, off licences, breweries, pharmacies, chemists, newsagents, animal rescue centres and boarding facilities, building merchants, petrol stations, vehicle repair and MOT services, bicycle shops, taxi and vehicle hire businesses, education providers including tutoring services, banks, building societies and other financial providers, post offices, funeral directors, laundrettes and dry cleaners, medical practices, veterinary surgeries and pet shops, agricultural supply shops, garden centres, storage and distribution facilities, wholesalers, employment agencies and businesses, office buildings, automatic car washes and mobility support shops.
Hospitality definition: a business whose main function is to provide a venue for the consumption and sale of food and drink
Types of businesses – Hospitality (up to £18,000)
Food courts, Public houses/pub restaurants, Restaurants, Roadside restaurants, Wine bars, Cafes.
For these purposes, the definition of a hospitality retail business should exclude: food kiosks and businesses whose main service is a takeaway (not applicable to those that have adapted to offer takeaways during periods of restrictions, in alignment with previous COVID-19 business grant schemes).
Leisure definition: a business that provides opportunities, experiences and facilities, in particular for culture, recreation, entertainment, celebratory events, days and nights out, betting and gaming
Types of businesses – Leisure (up to £18,000)
Bingo halls, Bowling alleys, Casinos and gambling clubs, Cinemas, Ice rinks, Museums and art galleries, Roller skating rings, Stately homes & historic houses, Theatres Zoos & safari parks, Amusement parks, Pleasure piers, Pavilions, Conference centres, Exhibition centres including for use as banquet halls and other events, Wedding venues, Events venues, Heritage railways, Public halls, Night clubs & discotheques, Hostess bars, Sexual entertainment venues, Shisha bars, waterpipe consumption venues, Arenas, Concert halls, Go kart rinks, Model villages, Tourist attractions, Aquaria, Miniature railways, Theme parks, Amusement arcades including adult gaming centres, Animal attractions at farms, Wildlife centres, Botanical gardens, Circus, Visitor attractions at film studios, Soft play centres or areas, Indoor riding centres, Clubs & institutions, Village halls & scout huts, cadet huts etc.
For these purposes, the definition of a leisure business should exclude: all retail businesses, coach tour operators, tour operators and telescopes.
Accommodation definition: a business whose main lodging provision is used for holiday, travel and other purposes.
Types of businesses – Accomodation (up to £18,000)
Caravan parks, Caravan sites and pitches, Chalet parks, Coaching inns, Country house hotels, Guest & boarding houses, Hostels, Hotels, Lodges, Holiday apartments, cottages or bungalows, Campsites, Boarding houses, Canal boats or other vessels, B&Bs, Catered holiday homes, Holiday homes.
For these purposes, the definition of an accommodation business should exclude: private dwellings, education accommodation, residential homes, care homes, residential family centres, beach huts.
Gym & Sport definition: a commercial establishment where physical exercise or training is conducted on an individual basis or group basis, using exercise equipment or open floor space with or without instruction, or where individual and group sporting, athletic and physical activities are participated in competitively or recreationally.
Types of businesses – Gym & Sport (up to £18,000)
Dance schools and centres, Dance studios, Gymnasia/fitness suites, Cricket centres, Ski centres, Sports and leisure centres, Outdoor sports centres, Outdoor adventure centres, Squash courts, Tennis centres, Sports courts, Swimming pools, Shooting and archery venues, Driving ranges, Water sport centres, Golf courses.
For these purposes, the definition of a gym & sport business should exclude: home gyms, home exercise studios, home sports courts and home sports grounds.
Personal care definition: a business which provides a service, treatment or activity for the purposes of personal beauty, hair, grooming, body care and aesthetics, and wellbeing
Types of businesses – Personal Care (up to £18,000)
Spas, sauna and steam rooms Hairdressing salons, Tanning salons, Nail salons, Massage centres, massage treatments, Tattoo and piercing studios, Holistic therapy (reflexology, massage, acupuncture), Barbers, groomers, Beauty salons, Beauticians, aesthetics, Other non-surgical treatments.
For these purposes, the definition of a personal care business should exclude: businesses that only provide personal care goods, rather than services; businesses used solely as training centres for staff, apprentices and others; businesses providing dental services, opticians, audiology services, chiropody, chiropractors, osteopaths and other medical or health services, including services which incorporate personal care services, treatments required by those with disabilities and services relating to mental health.