Eligibility for grant funding

By now many businesses eligible for grant funding from their local authority, either via the Small Business Grants Fund or the Retail, Hospitality and Leisure Grant Fund, should have been contacted to make them aware that they are eligible, with some already receiving funding.

However, there are still lots of businesses out there who think they may be eligible for a grant but have not been contacted yet.

To help, we have taken another look at the rules and tried to answer some of the common questions about the grants offered by the Government in response to the COVID-19 pandemic.

I am already in receipt of the Small Business Rate Relief, which grant is best suited to me?

All businesses in England in receipt of either small business rates relief (SBRR) or rural rates relief (RRR) in the business rates system will be eligible for a grant of £10,000, known as the Small Business Grants Fund (SBGF).

Hereditaments included in this scheme are those which on the 11 March 2020 were eligible for relief, including those with a rateable value between £12,000 and £15,000 which receive tapered relief.

I was not in receipt of SBRR or RRR, but I fit the same criteria am I eligible for the SBGF still? 

No – if you were not previously in receipt of these reliefs on or before 11 March 2020 you will not be eligible for a grant. If you are unsure if you received this relief it is recommended that you speak with your local authority.

I work in the hospitality sector and I understand I may be eligible for funding, which grant is available to me? 

Businesses in England that would have received the expanded retail discount on 11 March with a rateable value of less than £51,000 are eligible for cash grants for each property they own and operate from. This is known as the Retail, Hospitality and Leisure Grant Fund (RHLGF).

Those with a property that has a rateable value of up to £15,000 will receive a grant of £10,000, while those with a property that has a rateable value of between £15,000 and £51,000 will receive a grant of £25,000. Businesses with a rateable value over £51,000 are not eligible.

Are charities eligible for these grants? 

Charities that otherwise would meet the necessary criteria, but whose bill for 11 March was reduced to nil by a local discretionary award are still eligible for the RHLG, according to the guidance.

What businesses are excluded from grant funding?

Hereditaments that are occupied for personal use, such as private stables, beach huts, moorings, car parks and parking spaces are excluded from both schemes.

Additionally, businesses that were in liquation or were dissolved as of the 11 March cannot apply for either scheme.

How is income from grants taxed?

Grants are generally considered to be a taxable form of income, they can be the taxed the same as any other forms of income, such as money earned through trade, via Corporation Tax.

Is grant income subject to VAT?

Grant income is outside the scope of VAT, therefore no VAT is payable when you receive a grant, but you may be able to reclaim VAT from any asset paid for via a grant, as long as it is within the ‘normal’ VAT rules.

How do I apply for support via the grant funds?

Neither scheme has a mandatory application process. Instead, businesses should be contacted by their local authorities who will outline how they can claim a grant.

In some cases, where a business has an existing direct debit to pay business rates, local authorities can handle the application automatically or they may request additional details via an online form.

If you have still not been contacted by your local authority and believe you are eligible, we recommend that you speak to the relevant officer at your council to find out how the funding is being delivered in your area.

Here to Help

We appreciate that you will be keen to access whatever support is on offer, including the various grant funds on offer. If you believe you are eligible but haven’t been contacted then you should speak with your local authority first.

They should be able to confirm your eligibility and help with the application. If you require any evidence to support an application, please contact our team.