WILL MY BUSINESS QUALIFY FOR A LOCAL AUTHORITY DISCRETIONARY GRANT?
On 29 May 2020 a new Discretionary Grant Fund was launched to support small and micro businesses that are not eligible for other grants, such as the £10,000 small business grant.
As a quick re-cap, most small businesses that were eligible for small business rates relief will have received a £10,000 small business grant from their local authority, while those in the retail, hospitality and leisure sectors should have received a grant of either £10,000 or £25,000.
But what about those businesses that didn’t qualify for either? In a bid to help these businesses a new Discretionary Grant Fund was launched late last month to ensure that all small and micro businesses are treated fairly.
The grants are being administered by local Councils, but the qualifying criteria has been set nationally, with businesses needing to meet the following conditions to apply:
- They must be a Small or Micro businesses (see further info below);
- They must have relatively high ongoing fixed property-related costs (over £250 per month);
- They must be able to demonstrate that they have suffered a significant fall in income due to the COVID-19 crisis (see below);
- They must occupy property, or part of a property, with a rateable value or annual rent, annual mortgage payments below £51,000 (where a rateable value exists this will be the figure used)
- The business must have been trading on the 11 March 2020.
- The business must not have been eligible or received a grant from the existing grant scheme or other support schemes (excluding the Self-Employed Income Support Scheme and the Job Retention Scheme)
Grant applications opened on 2 June 2020 and the deadline for applying is midnight on Tuesday 16 June 2020.
So, what is a small or micro business? To meet this condition your business must meet the following criteria:
- Turnover under £10.2m per annum;
- Balance sheet value of not more than £5.1m;
- Less than 50 employees.
And what is meant by ‘significant fall in income’? The grants are aimed at businesses in extreme financial distress and to meet this condition, businesses would need to demonstrate to the Council evidence of the reduction in income suffered, a similar reduction in variable costs, the consequential impact on profits, and the cashflow issues currently being faced. The way in which this condition is assessed could vary from Council to Council, and unfortunately no definition is given for what is likely to be considered to be a ‘significant fall in income’.
Grants awarded to successful applications could be £25,000, £10,000, or less, depending on the circumstances.
So, who is likely to qualify for a discretionary grant? Below are some examples of businesses that might be eligible:
- Businesses sub-letting or in shared workspaces that do not get their own rates bill;
- Businesses with premises that have a rateable value over £15,000 but under £51,000 who are not in the retail/leisure/hospitality sectors;
- Businesses with more than one small premises that don’t qualify for Small Business Rates Relief as a result;
- Businesses that rent space to trade but aren’t assessed to rates (eg. market traders);
- Landlords that have empty premises;
- Charities that get charitable rates relief, but would have otherwise been eligible for Small Business Rates Relief;
As a useful double check of the Coronavirus support measures available to your business this gov.uk tool is worth checking out.