Discretionary Grants Scheme

Please note, this scheme closed on 30 June 2020 and applications are being processed as quickly as possible

Introduction

This guidance sets out the process for applying for the Local Authority Discretionary Grants Fund.  It should be read alongside the Government guidance.

This Discretionary Grants Fund is an additional fund to the Small Business Grant Fund (SBGF) and the Retail, Hospitality and Leisure Grant Fund (RHLGF).  It is aimed at certain small and micro businesses who were not eligible for the SBGF or the RHLGF but which have relatively high ongoing, fixed property-related costs and can demonstrate that they have suffered a significant fall in income due to coronavirus. 

Which types of business will be prioritised in the Discretionary Grants Fund?  

The following types of businesses will be prioritised for grants from within this funding pot:  

  • Small businesses in shared offices or other flexible workspaces. Examples could include units in industrial parks, science parks and incubators which do not have their own business rates assessment. 

  • Regular market traders with fixed building costs, such as rent, who do not have their own business rates assessment. 

  • Bed & Breakfasts which pay council tax instead of business rates. 

  • Charity properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief. 

Whilst the government has guided local authorities as to the types of business that the government considers should be a priority for the scheme, it is a matter for Mole Valley District Council (MVDC) to determine which businesses will be eligible for the scheme. The following list is not exhaustive, although sets out the types of organisations that may consider applying for a grant from this discretionary fund: 

  • Businesses in the supply chain to the retail, leisure and hospitality industry that did not qualify for business grants but pay business rates or other fixed property costs

  • Businesses which did not qualify for business grants and have relatively high property costs 

  • Businesses in the supply chain to the travel, holiday and airline sector that did not qualify for the RHLGF 

  • Cafes, shops, restaurants and other food and beverage outlets within shared premises who did not have their own rating assessment in order to qualify for the RHLGF 

  • Businesses that provide sports, cultural, arts and tourism services that did not qualify for the RHLGF 

  • Businesses who may qualify for a business grant but are waiting for a decision on an application made prior to 11 March 2020 in respect of Check, Challenge or Appeal from the Valuation Office Agency (VOA). 

NB: Businesses whose applications to VOA in respect of Check, Challenge or Appeal were made after the 11th March 2020 will not be eligible for consideration. 

Eligibility  

The Discretionary Grants Fund is for businesses that are not eligible for other support schemes. Businesses which have received cash grants from any other central government coronavirus related scheme are ineligible for funding from the Discretionary Grants Fund. Other grant schemes include but are not limited to:  

  • Small Business Grant Fund  

  • Retail, Hospitality and Leisure Grant  

  • The Fisheries Response Fund  

  • Domestic Seafood Supply Scheme (DSSS).  

  • The Zoos Support Fund  

  • The Dairy Hardship Fund  

Businesses who have applied for the Coronavirus Job Retention Scheme, or Self-Employed Income Support Scheme (SEISS) are eligible to apply under this scheme. 
 

The Discretionary Grants Fund is primarily and predominantly aimed at:  

  • Small and micro businesses, as defined in Section 33 Part 2 of the Small Business Enterprise and Employment Act 2015 and the Companies Act 2006. 

  • Businesses with relatively high ongoing fixed property-related costs 

  • Businesses which can demonstrate that they have suffered a significant fall in income due to coronavirus

  • Businesses which occupy property, or part of a property, with a rateable value or annual rent or annual mortgage payments below £51,000. 

  • Business with fewer than 50 employees  

  • Businesses that were trading on or before 11th March 2020.  
     

To be a small business, under the Companies Act 2006, a business must satisfy two or more of the following requirements in a year: 

  • Turnover: Not more than £10.2 million 

  • Balance sheet total: Not more than £5.1 million  

  • Number of employees: a headcount of staff of less than 50. 
     

To be a micro business, under the Companies Act 2006, a business must satisfy two or more of the following requirements:  

  • Turnover: Not more than £632,000 

  • Balance sheet total: Not more than £316,000 

  • Number of employees: a headcount of staff of not more than 10 
     

Companies that are in administration, are insolvent or where a striking off notice has been made are not eligible for funding under this scheme.  

The Discretionary Grants Fund is not intended to be used to make grants to businesses which occupy properties with significantly higher rateable values. This is because the business grants schemes have been designed to help small businesses. £51,000 is therefore the accepted threshold in the business rates system (and can only be increased by an individual local authority at their discretion in exceptional circumstances – see table below) for a ‘small’ business, as only businesses which occupy properties with a rateable value of less than £51,000 can benefit from the Small Business Multiplier rate.  

If there is no rateable value for the property, the local authority must estimate the rateable value and consider if the business is below this threshold. This threshold applies across England, thus providing a straightforward existing basis which local authorities can use to issue grants.  

Evidence required for the Discretionary Grants Fund application 

For an application to be considered, we require businesses to demonstrate that they meet the eligibility criteria stated above. We anticipate that to do this, you will need to provide: 

  • Evidence of property costs such as rent, rates or mortgage payments above the de minimis level of £250 per month.   

  • Evidence to demonstrate a substantial loss in income as a result of coronavirus. This is likely to be in the form of filed accounts for previous years and management accounts / bank statements for the current period. 

  • Evidence of compliance with the definition of a small or micro business. 

  • Confirmation that the business has not received any grant under the grant schemes mentioned in sections 12-14 above. 

  • Confirmation of State Aid compliance. 

Annual property costs will include rent, mortgage payments, insurance, rates and flexible licence fees. 

State Aid 

There is a requirement for all grants made under this Discretionary Grants fund to be state aid compliant.  Please see further government guidance (Section 45-50). 

How much funding will be awarded?  

Most grant allocations will be up to £10,000. The maximum allocation permitted of £25,000 will only be made in very exceptional circumstances. 

In order for the Discretionary Grants Fund to benefit the maximum number of eligible small / micro businesses, it is proposed to have 4 levels of grant payments, directly proportionate to the relative level of property costs for the business and taking into account the relative impact on income due to coronavirus.  

 

The grant levels and eligibility criteria are presented in the table below: 

Category 

Maximum Grant Amount  

Criteria 

At least £250 in rent or flexible licence fee per calendar month. / Eligible market trader, unable to trade with ongoing costs. 

£2,500 

Eligible market trader unable to trade or local business with Surrey registered trading address, trading on or before 11 March 2020. 

RV or property costs up to £15K per annum 

£5,000 

RV or where no RV rent/ mortgage costs, service charges. 

RV or property costs between £15,001 and £51,000 per annum 

£10,000 

RV or where no RV rent/ mortgage costs, service charges. 

RV or Property costs of over £51,000 – a payment of £25,000 to be made to business applicants only in exceptional circumstances 

£25,000* 

Exceptional circumstances are: 

Business closed completely and 100% income lost from 18th March 2020 – 13th May 2020  

Must meet all 3 conditions – RV, income and closure. 

*  Any such exceptional payment would amount to £25,000 only and not any value up to £25,000, as per the government guidelines. 

If the fund is oversubscribed with the applications received, MVDC reserves the right to amend the grant levels on a pro-rata basis, based on the applications received and approved, as a way of dealing with this situation, should it arise. 

 

Decision Making 

  • Individual grant decisions will be made on a delegated basis by a panel of designated senior officers based on the approved guidelines.   
  • The decision of the senior officers will be final. There is no right to appeal. 
  • All decisions will be communicated by email to businesses, with grant payments if approved made quickly.  

Payments of Grant and Tax 

  • All payments of grant will be made by a BACS transfer to the company or business nominated bank account. 
  • Grant income received by a business is taxable therefore funding paid under the Local Authority Discretionary Grants Fund will be subject to tax. 
  • Only businesses which make an overall profit once grant income is included will be subject to tax. 

Managing the risk of fraud 

  • All local authorities administering the grants in Surrey will not accept deliberate manipulation and fraud. Any business caught falsifying their records, providing false information or declarations to gain grant money will face prosecution and any funding issued will be subject to claw back, as may any grants paid in error. 
  • All information is subject to internal and external audit checks.

Contact us

If you have any queries regarding this scheme, please email discretionarygrants@molevalley.gov.uk