COVID-19 Business Support Grants: Local Authority Discretionary Grant Fund
The Discretionary Grant Scheme is now closed.
As much as we would like to be able to offer financial support to every business in the borough, funding for the scheme was extremely limited and capped by the Government. Unfortunately, this funding has now been fully committed.
Our dedicated COVID-19 web page for businesses is regularly updated with the latest advice and support for businesses. Please read our advice for businesses, self-employed and employers for further information.
Small businesses in Gateshead are facing unprecedented challenges as a result of trading restrictions and social distancing measures imposed in response to the Coronavirus pandemic and a loss of income. The Discretionary Grant Fund will provide a vital lifeline to many of the borough's smallest businesses ensuring they are able to continue trading and keeping local people in employment.
This is an additional fund to the Small Business Grant and the Retail Hospitality and Leisure Grant. It is aimed at certain small businesses who were not eligible for the Small Business Grant Fund or the Retail, Leisure and Hospitality Fund, and which have relatively high ongoing, fixed property-related costs, and which can demonstrate that they have suffered a significant fall in income due to the COVID-19 crisis.
The Government guidance issued on 13 May and 22 May 2020 gives the Council discretion over the scope and eligibility criteria for the grant scheme, and its decisions regarding the scheme will be final.
Businesses that have not previously been able to apply for a grant in their own right may now apply to this scheme if they meet all of the other eligibility criteria set out in this guidance.
Businesses eligible to apply to the Discretionary Grant Scheme must have been trading on 11 March 2020, located in the borough of Gateshead and be:
businesses occupying and trading from commercial property with a National Non-Domestic Rate (Business Rates) assessment Rateable Value of less than £51,000
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 (see below) that occupy shared offices, other flexible workspaces or commercial property not subject to their own rates assessment, including market traders, or
bed and breakfasts which pay Council Tax instead of business rates and were registered with the Council's licensing team on 11 March 2020, or
charities occupying properties in receipt of charitable business rates relief which would otherwise have been eligible for Small Business Rates Relief or Rural Rate Relief
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 of not more than £10.2 million
balance sheet total of not more than 5.1 million
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 of not more than £632,000
balance sheet total of not more than £316,000
a headcount of staff not more than 10
Applicants must be able to demonstrate:
Ongoing fixed property-related costs of at least £250 per month. Eligible costs to include, rent, mortgage payments, insurance, utilities and business rates.
A significant fall in income due to the COVID-19 crisis
That they were trading on the 11 March 2020
Businesses who have applied for the Coronavirus Job Retention Scheme and those eligible for the Self-Employed Income support scheme (SEISS) are eligible to apply for this fund.
Businesses eligible for cash grants from any other central government COVID related scheme are ineligible for funding from the Discretionary Grants Fund. Such 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
Further ineligible businesses include:
businesses that employ more than 50 people or that don't satisfy the qualifying criteria as small or micro businesses as set out above
home based businesses operating from domestic properties, excluding bed and Breakfasts
businesses unable to demonstrate ongoing fixed property costs of at least £250 per month
businesses with a Business Rates valuation of £51,0000 or more
companies that were in financial difficulty on 31 December 2019 or are in administration, are insolvent or where a striking-off notice has been made
The Council reserves the right to vary the terms of the scheme at any time, and without notice, should it be necessary to do so.
The Council will not approve or make payment of a further grant to a business that has already received a grant or partial grant passed on by a landlord under one of the schemes mentioned above.
For an application to be considered, eligible businesses are required to demonstrate that they meet the eligibility criteria above. To do this you will need to provide:
your Business Rates account number where you have one
evidence of property costs such as rent, rates or mortgage payments, this should take the form of leases/agreements covering 11 March 2020 showing an obligation to pay and bank statements showing that payments have been made
a declaration that the business has suffered a substantial loss in income as a result of the current situation
confirmation of complying with the definition of a small or micro Business as set out above
confirmation that the business has not received any grant under the grant schemes mentioned in above
The United Kingdom left the EU on 31 January 2020, nonetheless under the Withdrawal Agreement the State aid rules continue to apply during a transition period, subject to regulation by the EU Commission.
Grant awards of up to and including £10,000 can be provided under the De Minimis rules, meaning applicants can receive up to €200,000 of aid within a three year period. Applicants will be required to declare any other de minimis aid received in the last three years.
Applicants will be required to declare they were not an undertaking in difficulty on 31 December 2019 and are not in administration, insolvent or subject to a striking-off notice.
The Council has been awarded limited funds from Government for this scheme and it is expected that there will be a high level of demand from businesses. In order to assist as many priority businesses as possible, grants to eligible small and micro businesses are limited to £5,000. The permitted allocations of £10,000 and £25,000 will only be made in very exceptional circumstances.
If your business operates out of more than property, a single grant of £5,000 will be awarded.
Payments will be made directly to approved recipients' bank accounts by electronic transfer.
Beneficiaries will receive written confirmation stating that by accepting the grant payment, the business confirms that they are eligible for the grant scheme, including that any payments accepted will be subject to state aid requirements.
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.
The Government and the Council will not accept deliberate manipulation and fraud and any business caught falsifying their records to gain grant money will face prosecution and any funding issued will be subject to claw back, as may any grants paid in error.
State Aid rules and requirements apply to this grant scheme.
The Council does not accept any liability for any issues that may arise for businesses because of applying for, receiving, or not receiving grant payments under this scheme.
Grant awards will be made to applicants satisfying the above eligibility criteria subject to the availability of resources. The scheme will close to new applications once all funds are committed.
There is no appeals process.