New Grants for Local Lockdowns

As Coronavirus restrictions in some areas are tightened beyond the new ‘Rule of Six’ announced last week, new grants are available for affected businesses. Under new rules, affected businesses will be eligible for grants to go towards their loss of earnings.

Businesses in England that have to close as a result of local lockdowns or restrictions will be able apply for grants of up to £1,500 per property every three weeks. This may well be different in Wales, Scotland and Northern Ireland, so please check if you aren’t in England.

Please note that this is in addition to any other support you may be receiving, and it is a grant, so you do not have to pay it back. The income will be taxable however.

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

Any businesses still closed under national guidelines, such as nightclubs, will not be eligible for a grant.

To be eligible for the grant a business must have been required to close due to local Coronavirus restrictions. The largest businesses will receive £1,500 every three weeks they are required to close. Smaller businesses will receive £1,000.

The distinction between large and small businesses, and the level of grant available, will be based on the premises the business occupies. Those businesses who occupy a property with a rateable value of less than £51,000 or who occupies a property or part of a property subject to an annual rent or mortgage payment of less than £51,000, will receive £1,000.

If a business occupies a 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.

What if you don’t pay Business Rates, or have an office?

Local authorities will receive additional funds to enable them to help businesses that may not be on the business rates list. This discretionary fund can pay out up to £1,500. They will decide the criteria under which they will make payments.

Steve Barclay, chief secretary to the Treasury, said: ‘These grants provide businesses with a safety net as they temporarily close their doors to help save lives in their local areas.

‘As local economies eventually and carefully re-open after local interventions, our Plan for Jobs is there waiting to help businesses get back on their feet, protect jobs and thrive in the future.’

Which areas are affected by local lockdowns?

If you’d like to check the restrictions imposed in different areas, you can do so here: https://www.gov.uk/government/collections/local-restrictions-areas-with-an-outbreak-of-coronavirus-covid-19

And if you’re not affected?

If you’re not affected by local lockdowns at this stage, that’s great news! We would strongly recommend though that you familiarise yourself with the web address of your local authority, and potentially find out which department would deal with grants if things change.

The figures for cases are changing rapidly again at the moment and it’s best to be prepared.

If your area does go into a local lockdown you want to make sure that you’re at the front of the queue for the local authority grants!

How were the new grants received?

The reaction to the new grants from business groups was largely positive, but many thought they need to go further.

Annie Gascoyne, Director of Economic Policy at the CBI, said: ‘New direct cash grants will certainly help small businesses if their area falls under new restrictions to protect public health. But the impact of COVID-19 is still hurting businesses, so the government will need to look at more targeted support in the autumn. That needs to include a successor to the furlough scheme and allowing businesses to defer VAT payments from July to September.’

Andy Chamberlain, Director of Policy at IPSE, commented: ‘We welcome the fact the government is supporting businesses affected by local lockdowns. However, although this will help some self-employed people with business premises, it will leave the great majority out in the cold.’

Mike Cherry, National Chairman of the FSB said: ‘Though a lot of firms have now been able to reopen, thousands are still impacted by local lockdowns. We look forward to working together with local government to make sure there is a straightforward claims process for all firms affected.’

You can see the full news release here: https://www.gov.uk/government/news/ministers-announce-new-grants-for-businesses-affected-by-local-lockdowns

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