Thank you for sharing your experiences of accessing grant money from your local authority during the pandemic, for filling in our surveys and sending feedback to us. We have use this information to put together an evidence pack for Government, shared this with BEIS, The Treasury, The Minister for Small Businesses, the Government Hospitality Taskforce, the Local Government Association and other associations in the events and hospitality sector.
As you know, we pushed for the introduction of grants for businesses who do not pay rates and this was introduced at the end of October 2020 as the ARG, we have been advising you to apply for the ARG since and have been pushing for the guidance to be updated so that it is fit for purpose.
Although local authorities are administering these grants, the Government are putting more and more pressure on them to get this money paid out to those it was meant for. We are happy to say that an additional £425m has been added to the finding pot and the ARG guidance has now been updated.
The £425m added to the UK pot for these grants top up the original £1.4b provided to all parts of the UK – England have called this ARG, Scotland, Wales and Northern Ireland have called the schemes they use to administer this money by a range of names – you can find out more here. As the additional money is given to local authorities, we will provide examples of how they are outlining this from across the UK so keep reading our mailers and check the website for updates.
Essentially, the number of businesses who are eligible will be far greater and the amount of money you can access should increase.
- Previous guidance for the Additional Restrictions Grant indicated that businesses must have been trading before relevant restrictions were introduced in order to be eligible. This is no longer the case.
- All businesses that are trading and meet other eligibility criteria may apply to receive funding under this scheme.
- There is no starting date from which businesses must have been trading in order to qualify for grant funding.
- As well as this, fixed costs such as lockups / yards / prep-kitchens etc. can be included in your claim.
If you are a mobile caterer, street food caterer, wedding caterer, mobile bar, festival caterer or event caterer and have not been able to get a Local Restrictions Grant then you must all apply for an ARG grant. These grants have been created for businesses like you and even if you have already applied you must contact your local authority and apply again. If they have already issued you with a grant then they may receive additional grant money automatically, HOWEVER, you should press your local authority to support you with this ARG funding.
There is still a significant amount of money that local authorities have not paid out and this money must be accessed by our members and the wider sector. If you have not or are having difficulties accessing these grants then please write to your MP using our templated letter and let us know via email@example.com and our feedback form we can feed this back into Government.
Local Authorities have until 30 June 2021 to prove that they have spent or made a validated attempt to spend 100% of their first two ARG allocations. This is to speed up the allocation of the existing £1.6bn in ARG funding as only around 12% of this was spend when the last figures were published.
We have outlined what the most up to date ARG is below for you below:
Additional Restrictions Grant (ARG)
The Additional Restrictions Grant (ARG) provides additional funding for local authorities subject to national lockdown or Tier 3 restrictions, to support businesses that have had their trade affected by the restrictions. This includes:
- closed businesses that don’t pay business rates
- businesses that have not been required to close, but are still severely impacted
Each local authority has the discretion to establish business grant schemes or other business support as best fits their area.
Local councils have the freedom to determine the eligibility criteria for these grants. However, we expect the funding to help those businesses which – while not legally forced to close – are nonetheless severely impacted by the restrictions.
The guidance says that this could include:
- businesses which supply the retail, hospitality, and leisure sectors
- businesses in the tourism and events sectors
- business required to close but which do not pay business rates
What does this mean for you?
That Local Authorities have been told that although they have a choice on who they give grants to, that they should be giving help to businesses who haven’t been forced to close (e.g: events industry) but have been severely impacted as well as those who haven’t been able to trade because they are part of a supply chain that has closed (e.g: events industry).
When you were financially affected is now no longer a reason to exclude you, if fact if you started trading after the pandemic began you can now apply. In addition to this, the number of businesses who are eligible will be far greater and the amount of money you can access should increase.
How do local authorities make a decision?
In taking decisions on the appropriate level of grant, Local Authorities may want to take into account businesses outside of the business rates system, businesses that have not received any other grant support, the level of fixed costs of the business, the number of employees the business has, whether it is unable to trade online and the consequent scale of coronavirus losses
Previous guidance for the Additional Restrictions Grant indicated that businesses must have been trading before relevant restrictions were introduced in order to be eligible. This is no longer the case.
This is important and it will include businesses who haven’t been trading
All businesses that are trading and meet other eligibility criteria may apply to receive funding under this scheme. There is no starting date from which businesses must have been trading in order to qualify for grant funding.
This is important as it means that the grants are no longer dependent on the dates you were trading
How will my local authority know if I am trading?
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
When will the additional funding be available from?
Funding is to be provided from 1 April 2021 on a per-business basis to ensure that Local Authorities can target funding fairly and directly at business support.
Will grants be subject to tax?
Although you do not pay a grant back like you would a loan – grant income received by a business is taxable. The Additional Restrictions Grant will need to be included as income in the tax return of the business.
Only businesses which make an overall profit once grant income is included will be subject to tax.
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.
The updates mean that the time frames given for grants have been removed – now the focus is on whether you have been affected & how badly affected you have been – going forward you are not limited by dates – it is all about whether you have been severely affected and the rigid framework re: what constitutes hospitality has been removed and made more open.
Fixed costs are now included:
The grant payment must not exceed 70% of the applicant’s uncovered
fixed costs, except for micro and small enterprises (for the purposes of
this scheme defined as less than 50 employees and less than
£9,000,000 of annual turnover and/or annual balance sheet), where the
grant payment must not exceed 90% of the uncovered fixed costs
Exclusions to Additional Restrictions Grant funding 31. Businesses that have already received grant payments that equal the maximum permitted levels of subsidy will not be eligible to receive funding.
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 does this mean?
If you are eligible for ARG you can now access more money due to the updated subsidy allowance rules.
What do I do now?
Check your local authority website for updates and apply as soon as you can. We must stress again that there is still a significant amount of money that local authorities have not paid out and this money must be accessed by our members and the wider sector. If you have not or are having difficulties accessing these grants then please write to your MP using our templated letter and let us know via firstname.lastname@example.org and our feedback form we can feed this back into Government.
Here is the link to the Government Guidance, updated 22nd March:Government Guidance