Update: The Local Authority Discretionary Grants Fund

Guidance on how small businesses can apply for help from the Local Authority Discretionary Grants Fund has been issued by the Government.

The fund has been created to support small and micro businesses that are not eligible for other coronavirus grant schemes.

It plugs a loophole, which meant small businesses in shared office space missed out on a £10,000 cash grant, which is part of the government’s package of Covid-19 support measures.

The new additional fund is aimed at small businesses with ongoing fixed property-related costs.

The government has asked councils to prioritise small businesses in shared offices or other flexible workspaces, such as units in industrial parks or incubators.

Businesses with fixed property costs that are not eligible for the Small Business Grant Fund or the Retail, Hospitality and Leisure Grant Fund may be eligible.

Councils have discretion about how to prioritise the funding and businesses should check with their local authority for details of their scheme.

They should also visit their local council’s website to find out how to apply. https://www.gov.uk/find-local-council

Those that are eligible can get a grant of £25,000, £10,000 or any amount under £10,000.

Councils will run an application process and decide whether to offer a grant.

Businesses do not have to pay the grant back but it will be taxable. Only businesses which make an overall profit once grant income is included will be subject to tax.

You are potentially eligible if your business:

• is based in England
• has fewer than 50 employees
• has fixed building costs such as rent
• was trading on March 11, 2020
• has been adversely impacted by coronavirus

Other businesses on the government’s priority list include regular market traders, bed and breakfasts paying council tax instead of business rates.

Charity properties getting charitable business rates relief, which are not eligible for small business rates relief or rural rate relief, are also on the priority list.

You cannot apply if your business is in administration, insolvent or has received a striking-off notice.

And businesses are also ineligible if they are already claiming under another government grant scheme such as:

• Small Business Grant Fund
• Retail, Hospitality and Leisure Grant
• Fisheries Response Fund
• Domestic Seafood Supply Scheme
• Dairy Hardship Fund

However, they are still eligible if they’ve applied for the Coronavirus Job Retention Scheme or the Self-Employed Income Support Scheme. And businesses that apply for the discretionary grants scheme can still apply for coronavirus-related loans if they meet the criteria.

Payments of £10,000 or less count towards the total de minimis state aid allowed over a three-year period – €200,000. If you have reached that threshold, you may still be eligible for funding under the Covid-19 Temporary Framework.

Payments of £25,000 count as state aid under the Covid-19 Temporary Framework. The limit for the framework is €800,000.

Councils will ask businesses to complete a declaration confirming:

• They will not exceed the relevant state aid threshold
• They were not an ‘undertaking in difficulty’ on December 31 2019. This applies only to the Covid-19 Temporary Framework