Local Authority Discretionary Grant Fund

In response to the Coronavirus, COVID-19, the government announced there would be support for small businesses, and businesses in the retail, hospitality and leisure sectors, delivered through the Small Business Grant Fund and the Retail, Leisure and Hospitality Grant Fund.

This additional fund is aimed at small and micro businesses who were not eligible for the Small Business Grant Fund or the Retail, Leisure and Hospitality Fund.

 These grants are primarily and predominantly aimed at:

• Small and micro businesses, as defined in Section 33 Part 2 of the Small Business, Enterprise and Employment Act 2015 and the Companies Act 2006.
• Businesses with relatively high ongoing fixed property-related costs.
• Businesses which can demonstrate that they have suffered a significant fall in income due to the COVID-19 crisis.
• Businesses which occupy property, or part of a property, with a rateable value or annual rent or annual mortgage payments below £51,000.

To be a small business, under the Companies Act 2006, a business must satisfy two or more of the following requirements in a year—

• Turnover: Not more than £10.2 million
• Balance sheet total: Not more than 5.1 million
• Number of employees: a headcount of staff of less than 50

 To be a micro business, under the Companies Act 2006, a business must satisfy two or more of the following requirements:

• Turnover: Not more than £632,000
• Balance sheet total: Not more than £316,000
• Number of employees: a headcount of staff of not more than 10

HMRC want local authorities to exercise their local knowledge and discretion and they recognise that economic need will vary across the country, so they are setting some national criteria for the funds but allowing local authorities to determine which cases to support within those criteria.

They are asking local authorities to prioritise the following types of businesses for grants from within this funding pot:

• Small businesses in shared offices or other flexible workspaces. Examples could include 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 or Rural Rate Relief.

The list set out above is not intended to be exhaustive but is intended to guide local authorities as to the types of business that the government considers should be a priority for the scheme. Authorities should determine for themselves whether particular situations not listed are broadly similar in nature to those above and, if so, whether they should be eligible for grants from this discretionary fund.

Where limits to funding available for this scheme require local authorities to prioritise which types of businesses will receive funding, it will be at the local authorities discretion as to which types of business are most relevant to their local economy. There will be no penalty for local authorities because of their use of discretion to prioritise some business types.

Local authorities should set out the scope of their discretionary grant scheme on their website, providing clear guidance on which types of business are being prioritised, as well as the rationale for the level of grant to be provided (either £25,000, £10,000 or less than £10,000).

Eligibility

This grant funding is for businesses that are not eligible for other support schemes.  Businesses which are eligible for cash grants from any central government COVID related scheme (apart from SEISS) are ineligible for funding from the Discretionary Grants Fund.

Such grant schemes include but are not limited to:

• Small Business Grant Fund
• Retail, Hospitality and Leisure Grant
• The Fisheries Response Fund
• Domestic Seafood Supply Scheme (DSSS)
• The Zoos Support Fund
• The Dairy Hardship Fund

Businesses who have applied for the Coronavirus Job Retention Scheme are eligible to apply for this scheme.

Businesses who are eligible for the Self-Employed Income Support Scheme (SEISS) are eligible to apply for this scheme as well.

Only businesses which were trading on 11 March 2020 are eligible for this scheme.

Companies that are in administration, are insolvent or where a striking-off notice has been made are not eligible for funding under this scheme.