If your business is located in England and in an area designated for local lockdown, then you may be eligible to receive a new support grant announced 9 September 2020.

What the government has said

Businesses in England required to close due to local lockdowns or targeted restrictions will now be able to receive grants worth up to £1,500 every three weeks, Chief Secretary to the Treasury Steve Barclay told MPs today. To be eligible for the grant, a business must have been required to close due to local Covid 19 restrictions. The largest businesses will receive £1,500 every three weeks they are required to close. Smaller businesses will receive £1,000.

Payments are triggered by a national decision to close businesses in a high incidence area. Each payment will be made for a 3 week lockdown period. Each new 3 week lockdown period triggers an additional payment.

Other details published

It is inferred that these new grants will be managed and distributed by Local Authorities. Other details published include:

• any businesses still closed at a national level (e.g. nightclubs) will not be eligible
• if a business occupies premises with a rateable value of less than £51,000 or occupies a property or part of a property subject to an annual rent or mortgage payment of less than £51,000, it will receive £1000

• if a business occupies premises with a rateable value of exactly £51,000 or above or occupies a property or part of a property subject to an annual rent or mortgage payment of exactly £51,000 or above, it will receive £1500
• Local authorities will also receive an additional 5% top up amount of business support funding to enable them to help other businesses affected by closures which may not be on the business rates list. Payments made to businesses from this discretionary fund can be any amount up to £1500 and may be less than £1000 in some cases.
• Local authorities will be responsible for distributing the grants to businesses in circumstances where they are closed due to local interventions
• further eligibility criteria may be determined by Local authorities
• as with other Covid business grants, local grants to closed businesses will be treated as taxable income

 Is your business eligible?

As Local Authorities in affected areas of England are being funded to provide this support, it is implied that businesses will need to contact their Local Authority to secure funding under this new support initiative. It may take some time for the administration of the new grant to be organised but a call to your Local Authority seems to be advisable as businesses not registered on the rates list will be claiming from a discretionary fund.

Regional considerations

The Welsh and Scottish assemblies may follow suite and offer similar support in the regions. Details will be advised as they become available.

The UK Government has said is that it has guaranteed that the devolved administrations will receive at least £12.7 billion on top of their March Budget settlements to help them with their response to Covid-19 this year, with £6.5 billion for the Scottish Government, £4.0 billion for the Welsh Government and £2.2 billion for the Northern Ireland Executive.

The Barnett formula will apply in the usual way to any additional funding provided to departments in relation to this intervention.