Today’s Blog concerns breaking news and government changes to existing help packages, that have emerged over the last couple of days. Some are new, and the others are improvements to existing help schemes, so read on:
New discretionary grants available for left-out firms
The government has just announced that it has made available, an extra £617m to a range of businesses not previously covered by business rates holidays or support grants.
The new discretionary ‘top-up’ fund has been created for small businesses with ongoing fixed property costs. The kinds of businesses that may now qualify for help include those in shared workspace offices, regular market traders and small charities. Included are bed and breakfast establishments that pay council tax rather than business rates.
For a business to receive the grant, they must have fewer than 50 employees. And be able to show a significant drop in income due to coronavirus restriction measures: with the maximum subsidy available being £25,000.
With the new package, there is an option for discretionary grants of up to £10,000 to assist businesses with unique problems—the amount depending on local circumstances.
Local authorities have full discretion to allocate funds and make payments to potentially any business, even if they’re not specifically mentioned in the guidance notes.
More powers delegated to Local Authorities.
The small business grant intends to supplement the 12-month business rates holiday announced by the Chancellor in his March “coronavirus” Budget. The holiday applies to all businesses that pay rates. In contrast, small business grants support companies that do not pay rates.
The distribution of the grants, including any necessary checks on eligibility, will now be the responsibility of local authorities. Also, the government added two other funding options for local councils to administer:
- Small Business Grant Fund (SBGF) – £10,000 available to firms that qualify for the small business rate relief scheme or rural rate relief scheme, in properties with a rateable value of less than £15,000.
- Retail, Hospitality and Leisure Grant (RHLG) – £10,000 grants for retail, hospitality and leisure businesses with a rateable value of up to £15,000; those with property valuations between £15,000 and £51,000 will be eligible for £25,000.
Up to 1st May, local authorities have already paid out around £8bn to more than 620,000 businesses under these two schemes from a budgeted £12.3bn, so the discretionary £617m represents a 5% uplift, the Department for Business, Energy and Industrial Strategy reported. With the business rates holiday taken into account, the total relief provided to businesses through local councils will now add up to £22bn for the year.
While potential recipients can just sit back and wait for the existing support grants to arrive, the discretionary nature of the new funds makes it more likely that firms struggling without any previous help may need their accountants to contact local councils to advance their cause to get one of the new top-up or special discretionary grants. The Treasury has said that it will issue further guidance and the exact amounts available for each local authority in a few days.
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