What is the local lockdown grant?

Published: 16/10/2020

While many Brits, us included, had hoped we’d have waved goodbye to the C-word before Christmas, it’s now clear that won’t be the case and businesses up and down the country are battening down the hatches and worrying what it might mean for their future.

In some parts of England, the current state of affairs is tougher than others with local lockdowns in place for regions where the number of cases is higher than average, and for business owners within these zones it’s turning into a make or break situation.

Thankfully, the government has announced a local lockdown grant to ease the financial pressure. 

Here at takepayments, we’re passionate about helping small business owners pull through this nightmarish year, and that’s why we’ve done everything we can to help, including creating our COVID hub. In this blog, we’ll explain exactly what the local lockdown grant is, including how you can apply.

The local lockdown grant

Businesses that are forced to shut in England as a result of a local lockdown will be eligible to claim £1,500 every three weeks, the equivalent of £500 per week, under the local lockdown grant scheme.

So, if your business falls within one such zone and you’re forced to close, you should have access to £1,500 for each three week period you must stay shut. For small businesses that pay less in business rates, the payout will be £1000 every three weeks.

So, what qualifies as a small business? The lower rate applies to businesses which:

  • Occupy premises with a rateable value of less than £51,000, or
  • Occupy a property or part of a property subject to a mortgage payment or annual rent of less than £51,000.

What is the grant for?

The government has described the local lockdown grant as a ‘safety net’ and ‘additional financial lifeline’ for businesses forced to close and facing financial uncertainty.

There are no stipulations for how the grant is spent, although it’s likely most businesses will use the funds to pay for their premises, hence the breakdown of payouts.

The grant is designed to work alongside the existing Coronavirus Job Retention Scheme which will continue to top up the wages of workers unable to do their job as a result of the pandemic.

How do I claim?

Grant payments will be triggered by a national decision to shut businesses in high incidence areas.

Local authorities within the areas of local lockdown will be responsible for distributing the grants, so if you think you’re eligible contact your local authority to find out how to apply.

Bear in mind the government has stipulated local authorities will be given the power to outline further eligibility criteria if they see fit.

Good to know

An additional 5% top-up amount of business support funding will also be made available to local authorities to allow them to support other businesses impacted by local lockdowns and closures but who may not be on the business rates list. 

The amount on offer to applicable businesses with this discretionary fund could be anything up to £1,500 but may also be less than the £1000 for other small businesses.

Remember: as with other grants made available as a result of COVID this local lockdown grant will be treated as taxable income.

Businesses such as nightclubs, who are still permanently closed as a result of national COVID restrictions will not be eligible for local lockdown grants. 

What about Wales, Northern Ireland, and Scotland?

The UK government has made a guarantee that the devolved administrations of Wales, Northern Ireland, and Scotland will receive a minimum of £12.7 billion in addition to their March budget settlements to help them respond to the COVID-19 pandemic. This means:

  • £4 billion for the Welsh government, 
  • £2.2 for the Northern Ireland Executive, and
  • £6.5 billion for the Scottish government.

For more help, support, and guidance created specifically for small businesses in light of COVID-19 head to our dedicated customer support hub.

 

Bryony Pearce

Bryony Pearce

Copywriter

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