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Top-up to local business grant funds scheme

The Government has announced an additional £617 million of funding to supplement the small business grants scheme that paid grants to small businesses that either qualified for small business rates relief or the retail, hospitality and leisure grants scheme.  

The fund is to be distributed to local authorities and is aimed at supporting businesses and organisation which fell outside of the original schemes.  The Government intends to notify local authorities of the amount they will receive in the coming week.

This additional fund is aimed at small businesses with ongoing fixed property-related costs.  Local authorities are to be asked to prioritise businesses in shared spaces, regular market traders, small charity properties that would meet the criteria for Small Business Rates Relief, and bed and breakfasts that pay council tax rather than business rates. 

Local authorities may also choose to make payments to other businesses based on local economic need. The allocation of funding will be at the discretion of local authorities.  In all cases however the businesses must be small, under 50 employees, and they must also be able to demonstrate that they have seen a significant drop in income due to Coronavirus restriction measures.

There will be three levels of grant payments. The maximum will be £25,000. There will also be grants of £10,000. local authorities will have the discretion to make payments of any amount under £10,000. It will be for councils to adopt this approach to local circumstances.

Further guidance for local authorities will be set out shortly.

WR comment – while details of how this additional funding will be distributed remain sparse, this will be welcome news for those small businesses who to date have not qualified for any of the grants which have previously been paid.  While the previous funds were distributed based objective criteria (rateable value of properties etc) on this occasion local authorities will have discretion as to how these funds will be used.  The approach of each local authority is therefore likely to be different and it remains to be seen whether, for example, businesses which may potentially benefit will be able to apply for grants.  We will update as further information becomes available.

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