What are the New Business Grants in the UK?

Posted by Maria Katrina dela Cruz

Jan 15, 2021 4:36:13 PM

Entering January 2021, England was placed under the third nationwide lockdown amid threats of Coronavirus’ stronger strain. In line with this, the government released new business grants for affected SMEs in the UK.

The UK extending new business grants
Starting 5 January,  England entered yet another lockdown which is set to continue until 31 March. However, the imposed restrictions are to be reviewed by mid-February to see if relaxation of measures can begin. 

Third round of business support fund grants 

The government introduced a total of £4.6 billion new business grants to support 600,000 affected businesses during the lockdown period. Mainly, there are 4 sections of the government support:

  • Local Restrictions Support Grant (LRSG)
  • Additional Restrictions Grant (ARG) scheme
  • One-off Top-up grants
  • Extra Discretionary funds

One-off Top-up grants 

Chancellor of the Exchequer Rishi Sunak announced a one-off £9,000 grant per property for those in the retail, hospitality and leisure verticals. In addition, the treasury has also  given these companies 100% business rates relief.

The grant is focused in supporting organizations forced shut due to the latest national lockdown measures. 

How it works: 

  • Businesses with a rateable value of £15,000 and under will get £4,000.
  • Businesses with a rateable value of between £15,000 and £51,000 will get £6,000.
  • Businesses with a rateable value of more than £51,000 will get £9,000.

LRSG (Closed) Addendum

The LRSG scheme’s main goal is to provide support to businesses that were closed due to the national lockdown restriction. It is inclusive of companies in non-essential, retail, leisure, personal care, sports facilities and hospitality firms, and companies forced to provide a takeaway-only service.

How it works: 

  • Businesses properties with a rateable value of £15,000 or less will get a cash grant of £1,334 for each 42-day qualifying restrictions period.
  • Businesses properties with a rateable value over £15,000 and less than £51,000 will get a cash grant of £2,000 for each 42-day qualifying restrictions period.
  • Businesses properties with a rateable value of £51,000 or above will get  a cash grant of £3,000 for each 42-day qualifying restrictions period.

Related: After the Pandemic: Business Forecasts for 2021

ARG scheme  

Even if a business isn’t forced to close down, they’re likely to feel the blow of the decreasing demand in the market. 

In England, the ARG scheme is made available for businesses in tiers 2 and 3 that were severely impacted by the pandemic since 2020. The decision to provide the grant is given to the local council and authorities.

How it works: 

  • £934 a month for properties with a rateable value of £15,000 or under
  • £1,400 a month for properties with a rateable value over £15,000 and below £51,000
  • £2,100 per month for properties with a rateable value of exactly £51,000 and over

Extra Discretionary funds  

The government also provided £594 million for businesses affected by the restrictions but not eligible for the other existing grants. 

Read Next: Brexit Trade Deal: Where does the UK Stand this 2021?

 

Application for government support 

Grants are provided by local councils. To know the requirements for the government support, find your local council website here and speak with your local authorities.

 

As the UK rolls the new business grants, both the Treasury and the government aim to further the support for companies and protect the economy from the changing pandemic threat. We are yet to see how these government supports guide the businesses until the end of the first quarter.

 

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Topics: Accounting for Small Business, Financial News and Politics

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