Local lockdown business grants – how your small business can apply
With local lockdowns severely impacting some UK businesses, the government has stepped in with cash grants to help struggling firms. Find out how the scheme works, and how to apply.
It’s clear that local lockdowns are a key part of the government’s strategy to fight COVID-19. The measures introduced can vary but the most stringent local lockdowns can involve the government effectively ordering businesses in affected areas to close in order to reduce the risk of infection.
Obviously, this has a huge impact on businesses in those areas – many of which were struggling even before new restrictions were announced – and those affected have been calling for extra financial support alongside existing programs like the coronavirus job retention scheme.
The government has now responded, announcing that businesses ordered to close as a result of local lockdowns will get a cash grant of £1,500 (or £1,000 for smaller businesses) for every three weeks that they stay closed.
This guide will explain how the scheme works, which businesses are eligible for the £1,500 grants, and how to apply.
How does the local lockdown business grants scheme work?
The basic idea of the local lockdown business grants scheme is simple – financial support for businesses forced to close by local lockdowns.
However, as the official guidance makes clear, “forced to close” has a very specific meaning in this context.
So, if a business is allowed to stay open but sees trade plunge due to measures that restrict socialising, or has to change their business model (a restaurant only being allowed to serve takeaway food for example), they would not be eligible for a grant.
Another important exemption is that businesses which have been ordered to close at a national level across the UK (such as nightclubs) will also not be eligible for the grant.
How much local lockdown business grant will my business get?
There are two grant amounts available to eligible businesses:
- Large businesses will get £1,500 for every three weeks that they are forced to stay closed
- Small businesses will get £1,000 for every three weeks that they are forced to stay closed
This is calculated based on the value of the premises that your business occupies.
💷 💷 You are eligible for the £1,500 grant if:
- Your business premises has a rateable value (this value determines how much business tax you pay to the local council) of exactly £51,000 or above OR you occupy a property or part of a property that has an annual rent or mortgage payment of exactly £51,000 or above.
💷 You are eligible for the £1,000 grant if:
- Your business premises has a rateable value (this value determines how much business tax you pay to the local council) of under £51,000 OR you occupy a property or part of a property that has an annual rent or mortgage payment of less than £51,000.
Can I get a local lockdown business grant if I don’t pay business rates?
You may be able to.
Alongside the system discussed above, the government announced that local authorities would receive an extra 5% “top up” business support funding to distribute to businesses that have been forced to close but aren’t on the business rates list.
Payments from this fund can be any amount up to £1,500, and may be less than £1,000 in some cases.
How do I apply for a local lockdown business grant?
Local lockdown business grants will be distributed by local authorities, and the application process will therefore be handled on a local level.
Businesses who think they might be eligible for a local lockdown business grant should contact their local council who will be able to tell them what they should do to apply.
Local authorities may impose additional eligibility criteria – in other words boxes your business has to tick to get a grant.
Key points for your small business
- Cash grants are available to businesses that are forced to close due to a local lockdown
- Businesses in a particular area must have been ordered to close by the national government – local restrictions causing a slump in trade or a change in business model doesn’t count.
- Large businesses will be paid £1,500 for every three weeks they are forced to close, while smaller businesses will be paid £1,000 for every three weeks they are forced to close
- Businesses which have been ordered to close at a national level across the UK (such as nightclubs) are not eligible
- The grant amount is decided by the rateable value/annual mortgage or annual rent payment for your business premises
- If this is under £51,000 a year, then you will be paid the lower grant amount
- A top up fund has been set aside for councils to pay grants to affected businesses that don’t pay business rates
- Applications will be handled on a local level, so eligible businesses should apply via their local council
- Local councils may add further eligibility criteria