The Government’s support for small businesses has been unwavering and local councils, in the main, have administered the monetary assistance quickly. However, we know that no two companies are the same, nor are their needs during the pandemic.
We have seen those receiving small business rate relief, rural rate relief, and those in the retail, hospitality and leisure industry, issued with a one-off grant of £10,000. The Government realises though that there are small businesses that have not yet been supported but have high fixed property costs which are seriously feeling the effects of the pandemic.
Local authorities in England have a sizeable discretionary fund worth £617m to support businesses that have not been eligible for the small business or leisure grants. They will aim these funds predominantly at helping:
- Small and micro-businesses (under 50 employees)
- Businesses with relatively high ongoing fixed property-related costs
- Businesses that can demonstrate that they have suffered a significant fall in income due to the COVID-19 crisis
- Businesses that occupy a property, or part of a property, with a rateable value or annual rent or annual mortgage payments below £51,000.
The largest grant available is £25,000, this then drops to £10,000 and the local authority have discretion for any amount under £10,000.
The fund has been set up in the main to support property costs, but the local authorities have the discretion to use their local knowledge to help those in need. The local authorities have a fixed amount of funds and will, therefore, be prioritising:
- Small businesses in shared offices or other flexible workspaces, e.g. units in industrial parks, science parks and incubators which do not have their own business rates assessment
- Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment
- Bed & breakfasts which pay council tax instead of business rates: and
- Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for small business rates relief.
Due to having a limited amount per local authority, many have given application closing dates. These, in the main, are ranging from the middle to the end of June.
Businesses should submit applications through their relevant local authority website. You can find details on your local authority here including applications and closing dates.
Your local council will ask you to complete a declaration confirming that you will not exceed the relevant state aid threshold, and you were not an ‘undertaking in difficulty’ on 31 December 2019 (only applies to the COVID-19 Temporary Framework).
You will not be eligible for the local authorities discretionary fund if your business is already eligible for:
- The Small Business Grant Fund
- The Retail, Hospitality and Leisure Grant Fund
- The Fisheries Response Fund
- Domestic Seafood Supply Scheme
- The Zoos Support Fund
- The Dairy Hardship Fund
If your business is in administration or insolvent, it will also not be eligible for the scheme.
However, if you have applied for the Coronavirus Job Retention Scheme, you are still eligible. You must have been trading from the business you are claiming for, from at least the 11 March 2020.
If you already get state aid then the discretionary grants fund counts towards this threshold:
- £10,000 payments or less count towards the total de minimis state aid you’re allowed to get over three years (€200,000). If you have reached that threshold, you may still be eligible for funding under the COVID-19 Temporary Framework.
- £25,000 payments count as state aid under the COVID-19 Temporary Framework (€800,000).
This blog was written by Matthew Hector, a Manager at Price Bailey. For further information relating to this article, or any other COVID-19 related support you can contact Matt on the form below.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.