Scottish Government COVID-19 Restrictions Fund – Applications Open on 20 October at 9am

The Scottish Government has published further details about the new £40m Restrictions Fund to provide grants and employment support to assist businesses affected by the temporary restrictions put in place to slow down the spread of Coronavirus.

The new Restrictions Fund will provide: –

• One off grants of up to £3,000, depending on rateable value, to bars, restaurants and other businesses required to close by the regulations.

These grants will be distributed by local authorities. Up to £2,000 will be payable to businesses with a rateable value of up to £51,000 and for those with a rateable value of £51,001 or above the grant will be £3,000.

An upper limit of £15,000 will apply in total to any eligible businesses operating multiple premises

To be eligible to apply to the Business Closure Fund and the Business hardship fund the business must:-

• Be a hospitality or other relevant business required by law to close under the current “brake restrictions”

The Restrictions Fund will also provide: –

• Business hardship fund grants of up to £1,500 to some businesses that remain open but are significantly impacted by the restrictions, including those in the direct supply chains of organisations that had to close with effect from 9 October 2020.

An upper limit of £10,000 will apply in total to any eligible business operating multiple premises.

These grants will be also be distributed by local authorities who will “invite” applications.

There is a finite budget available for this support and therefore the Scottish Government have stated that these grants will be targeted at: –

• hospitality businesses and some gyms, required to close or operate in a restricted way, who can evidence a minimum 25% reduction in turnover during the brake period
• producers/wholesale businesses based in Scotland supplying primarily short-life goods or produce to hospitality businesses required by the regulations to close or operate in a restricted way and who can evidence a minimum 25% reduction in turnover during the brake period

The Scottish Government have advised that retail and businesses that provide takeaway food as “the core and established basis of their operations” are not eligible for these Closure or Hardship funds.

To be eligible to apply to either the Business Closure Fund or the Business hardship fund the business must: –

• Have been open and trading before 9 October 2020
• Have a business bank account. This is the account the grant will be paid into if the application is successful
• Have business premises registered for Non-Domestic rates.

Note businesses that pay rates via their landlords, rather than directly to a Council, are eligible to apply but will need to provide evidence of this by submitting a copy of the lease agreement.

• Not have breached wider COVID regulations/requirements prior to local restrictions

Applications can be made by Limited Companies, Sole Traders, Trusts and Partnerships provided they meet the eligibility conditions.  Applicants must not have certain connections to tax havens, as set out in the Coronavirus (Scotland) (No.2) Act 2020.

• A discretionary amount of £11m will be available to assist businesses that need support but do not fall into the above categories. For example, play centres that have been unable to re-open this month.

Detailed eligibility criteria for the Discretionary Business Hardship Fund are still being worked on and will be published as soon as they are finalised.  The Scottish Government have stated that this fund will be open to the hospitality and other businesses, detailed in the nationwide restrictions, which are not required to close and their immediate supply chains.

• Up to £9m of funding to help with the costs of re-furloughing staff by supporting the 20% salary contribution currently required by the UK Government.

This is to be “targeted” support and the Scottish Government is going to work with the STUC, employer organisations and HMRC to deliver this to employees.

How to apply

The Scottish Government is working with the local authorities to finalise the administrative arrangements required to ensure the efficient processing and payment of claims and to agree the appeals process.

The local authority websites will be updated at 9am on 20 October 2020 to enable funding applications to be made.   The Government have advised that there is no point in contacting local authorities at the moment. The fund will close for applications at 5pm on 3 November.

https://www.gov.scot/news/protecting-jobs-and-businesses/

https://www.gov.scot/publications/coronavirus-covid-19-restrictions-fund/

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.

Photo by Rod Long on Unsplash