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Discretionary Grant

On 2 May 2020, the Government announced further support for local authorities to enable them to support small businesses outside the scope of the existing business grant funds schemes. Further detail was published on 13 May 2020.

Eligibility

Government has advised that 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

Government has also requested that the following types of businesses are prioritised therefore in line with Government guidance East Northamptonshire Council (ENC) will prioritise these types of businesses:

  • businesses in shared offices or other flexible workspaces, for example, units in industrial parks, science parks and incubators which do not have their own business rates assessment but occupy a space that was part of a larger business rates assessment on 11 March 2020;
  • regular market traders with fixed costs such as rent who do not have their own business rates assessment;
  • bed and breakfast businesses that pay council tax rather than business rates; and
  • small charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief.

This grant funding is for businesses that are not eligible for other support schemes. Businesses which have received cash grants from any central government COVID-19 related scheme 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 Fund
  • 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 also eligible to apply for this scheme as well.

Businesses must have been trading from the premises in question on 11 March 2020.

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

Evidence

In applying for the discretionary grant you will need to provide evidence of the financial impact and demonstrate fixed building-related costs. Please consider and be ready to provide (and upload documents etc.) the following evidence when requested on the online form:

Evidence to demonstrate the financial impact of Covid-19 on your business:

  • 5 months of bank statements (January 2020 – May 2020)

Evidence to demonstrate fixed building-related costs:

  • Rental, lease or mortgage statement
  • Utility bills
  • Insurance certificate
  • Any evidence to support your other fixed building-related costs

We will also require:

  • Self-Assessment Unique Taxpayer reference (if a sole trader)
  • Companies House registration number (if incorporated)
  • VAT registration number (if VAT registered)

Grant Value

Due to the limited funds form Government for this scheme it is expected that most grant allocations made will be under £10,000. The maximum allocation permitted of £25,000 will only be made in very exceptional circumstances.

In order for the Discretionary Grant to benefit the maximum number of eligible small businesses, it is proposed to have 5 levels of grant, which will directly be proportionate to the level of property costs for the business, and take into account the impact on income due to the Corona Virus crisis. The grant levels are:

  • £2,500
  • £5,000
  • £7,500 
  • £10,000
  • £25,000

Awards are capped at £25,000.

Payments will be made directly into the approved recipients’ bank account by BACS.

State Aid

It is necessary for businesses applying to confirm compliance with State Aid rules, as the UK remains within the transition period, and the Council must be satisfied that State Aid requirements have been fully met and complied with when making grant payments. Guidance provides further detail regarding State Aid provisions.

Tax

The grant income received by a business is taxable therefore funding paid under this funding scheme will be subject to tax. Guidance clarifies that only businesses which make an overall profit once grant income is included will be subject to tax.

Managing the risk of fraud

The government and ENC will not accept deliberate manipulation and fraud - and any business caught falsifying their records to gain grant money will face prosecution and any funding issued will be subject to claw back, as may any grants paid in error.

If business is a Limited Company, Charity or Limited Liability Partnership, a Government “Spotlight” check will be carried out to verify with Companies House that they have properly filed their Accounts, that their Confirmation Statement is up to date and that there are no outstanding Winding Up Orders or First Gazette Notices. An application can only proceed if the Company passes the “Spotlight” check. Please ensure information is up to date in advance of making an application.

Application process

Grant applications will be accepted during the period Monday 1 June 2020 to 10 June 2020, after which time it will not be possible to submit an application.

Payments are expected to commence from the week of 15 June 2020.

If you have any queries please email discretionarygrant@east-northamptonshire.gov.uk

Application window closed on the 10 June 2020