Restart grants for business with rateable value

The guidance for local authorities on the restart grants that were announced at the Budget on the 3^rd of March has been released.

Here is what they are all about:

When Rishi Sunak unveiled the budget, days before we saw leaks in media across the UK about a scheme called the Restart Grant Scheme. The details of which have now been published and look like this:

• It is a one off grant
• It is only for businesses on the ratings list
• Local Authorities will need to administer the grants as quickly as possible from 1^st April
• Businesses must have been trading on 1^st April – this doesn’t mean trading as normal don’t worry, it means:

For the purposes of this grant scheme, a business is considered to be trading if it is engaged in business activity. This should be interpreted as carrying on a trade or profession or buying and selling goods or services in order to generate turnover. Fully constituted businesses in liquidation, dissolved, struck off or subject to a striking-off notice are not eligible under these conditions.

To help further, some trading indicators are included below that can help assess what can be defined as trading for the purposes of the grant schemes. Indicators that a business is trading are:

• The business has staff on furlough
• The business continues to trade online, via click and collect services etc.
• The business is not in liquidation, dissolved, struck off or subject to a striking of notice or under notice
• The business is engaged in business activity, managing accounts, preparing for reopening, planning and implementing COVID-safe measures

This list of indicators is not exhaustive and Local Authorities must use their discretion to determine if a business is trading.’

For our sector, these are the definitions that have been set out:

Hospitality definition:

A business whose main function is to provide a venue for the consumption and sale of food and drink

Local Authorities may use the following criteria to assess whether a business is eligible for a grant under this threshold:

• Businesses offering in-person food and drink services to the general public.
• Businesses that provide food and/or drink to be consumed on the premises, including outdoors

This is broken down further to give examples that include:

• Food courts
• Public houses/pub restaurants
• Restaurants
• Roadside restaurants
• Wine bars Cafes

However, there are exemptions:

For these purposes, the definition of a hospitality retail business should exclude: food kiosks and businesses whose main service is a takeaway (not applicable to those that have adapted to offer takeaways during periods of restrictions, in alignment with previous COVID-19 business grant schemes).

Leisure definition:

A business that provides opportunities, experiences and facilities, in particular for culture, recreation, entertainment, celebratory events, days and nights out, betting and gaming

Hospitality and Leisure businesses will get up to £18k in restart grants

This is how that is broken down:

For the purposes of this scheme, a leisure business can be defined as a business that provides opportunities, experiences and facilities, in particular for culture, recreation, entertainment, celebratory events and days and nights out.

Local Authorities may use the following criteria to assess whether a business is eligible for a grant under this threshold:

• Businesses that may provide in-person intangible experiences in addition to goods.
• Businesses that may rely on seasonal labour.
• Businesses that may assume particular public safety responsibilities.
• Businesses that may operate with irregular hours through day, night and weekends.

This is broken down further to give examples that include events venues, wedding venues, exhibition centres – more examples can be found in annex c of the guidance.

However, there are exemptions:

For these purposes, the definition of a leisure business should exclude: all retail businesses, coach tour operators, tour operators and telescopes.

What will I get? (Hereditaments are premises/buildings)

The Restart Grant will support hospitality, accommodation, leisure, personal care and gym business premises with one-off grants of up to £18,000 in Strand Two of the Restart Grant. The following thresholds apply for these businesses:

• Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £15,000 or under on 1 April 2021 will receive a payment of £8,000.
• Businesses occupying hereditaments appearing on the local rating list with a rateable value over £15,000 and less than £51,000 on 1 April 2021 will receive a payment of £12,000
• Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £51,000 or over on 1 April 2021 will receive a payment of £18,000

Will the grants be subject to tax?

Although you don’t have to pay back a grant they are taxable.

Payments made to businesses before 5 April 2021 will fall into the 2020/21 tax year. Payments after 6 April 2021 will fall into the 2021/22 tax year. Unincorporated businesses will be taxed when they receive the grant income.

What information will my local authority need from me?

Local Authorities will need to run an application process for all first-time applicants for a COVID-19 business grant and must be satisfied that businesses that have previously received related grants under this scheme meet the eligibility criteria for the Restart Grant. As a minimum, Local Authorities must hold the following information on all applicants:

1. Name of business
2. Business Trading Address including postcode
3. Unique identifier (preferably Company Reference Number (CRN)) if applicable. If not applicable, VAT Registration Number, SelfAssessment/Partnership Number, National Insurance Number, Unique Taxpayer Reference, Registered Charity Number will also be acceptable)
4. High level SIC Code
5. Nature of Business
6. Date business established g. Number of employees
7. Business rate account number (if applicable)
8. Cumulative total of previous funding received under all COVID-19 business grants schemes

If you have already received a grant from your local authority, they will most likely already have this information and could therefore make your grant payment automatically.

Exclusions:

Exclusions to Additional Restrictions Grant funding –  Businesses that have already received grant payments that equal the maximum permitted levels of subsidy will not be eligible to receive funding.

Subsidy allowance

The new domestic subsidy allowance for the COVID-19 business support grants took effect on 4 March 2021. Applications made prior to that date are subject to the previous rules.

This scheme is covered by 3 subsidy allowances:

• Small Amounts of Financial Assistance Allowance – you’re allowed up to £335,000 (subject to exchange rates) over any period of 3 years
• COVID-19 Business Grant Allowance – you’re allowed up to £1,600,000
• COVID-19 Business Grant Special Allowance – if you have reached your limits under the Small Amounts of Financial Assistance Allowance and COVID-19 Business Grant Allowance, you may be able to access a further allowance of funding under these scheme rules of up to £9,000,000, provided certain conditions are met

Grants under these 3 allowances can be combined for a potential total allowance of up to £10,935,000 (subject to exchange rates).

What shall I do now?

Check your local authority website regularly for details, read the guidance document in full  – this can be found here

If you are a market hall then you are included in this grant, this is something we have pushed for so many street food collectives will now be able to access this funding. Businesses who do not have rateable premises should read our latest ARG guidance here.

As always, please do let us know if you experience any problems in accessing these grants and we can feed this back into Government – get in touch via [email protected]