Erewash Borough Council

Erewash ARG Phase 2 Grant 12 April – 30 June 2021

Erewash Borough Council Additional Restrictions Grant funding scheme was created to help businesses that may have been severely impacted by Covid 19 restrictions but are not eligible for the main business support grant schemes. Our principles for this second round remain the same as phase 1;

  • Providing the greatest assistance to those eligible micro and small businesses,
  • Providing support to as many businesses as possible within the available financial resources,
  • Delivering a grant application which is simple, straightforward and makes decisions as quickly as possible, and,
  • Ensuring there is proper due diligence and fraud and error is avoided.

Phase 2

Phase 2 of ARG funding is being made available to businesses which are not eligible for the Restart Grant, but which are nonetheless experiencing a severe impact on their business. This scheme is to support the recovery of our local business community as national restrictions are gradually lifted and will replace the current Additional Restrictions Grants Phase 1.

Phase 2 ARG scheme will support businesses in the non-essential retail, hospitality, leisure, personal care and accommodation sectors and associated supply chain industries with a one-off grant, to reopen safely as COVID-19 restrictions are lifted.

A single one-off grant will be made to those businesses who have qualified for and received the phase 1 ARG grant and meet the criteria for Phase 2.

Businesses who have not previously applied for ARG will be considered on application and must complete application form.

Businesses who qualify for the restart grant will not be eligible for the Phase 2 ARG Grant.

The ARG phase 2 scheme is now closed. Grants will be awarded on a first-come-first served basis until funding has been exhausted, the decision of the awards panel will be final, and there will be no appeals process.

A hardship fund continues to be set aside for businesses both rateable and non-rateable who are likely to cease trading without emergency support. These will be considered on a case by case basis on application.  Please contact the local business grants team for more information and advice on supporting information required.

General Eligibility

For the purposes of this grant scheme, a business is considered to be trading if it is engaged in business activity such as carrying on a trade or profession, or buying and selling goods and services in order to generate turnover. Fully constituted businesses in liquidation, dissolved, struck off or subject to a striking-off notice are not eligible under these conditions.

Examples of evidence of trading include:

  • the business has staff on furlough
  • the business continues to trade online, via click and collect services.
  • the business is not in liquidation, dissolved, struck off or subject to a striking off notice or under notice
  • the business is engaged in business activity: managing accounts, preparing for reopening, planning and implementing COVID-safe measures

Other eligibility requirements for the scheme include:

  • The business was required to cease their retail operation in the January lockdown
  • They had their retail services restricted during the January lockdown
  • They can demonstrate at least a 20% reduction in trade during the January lockdown period.
  • The business must be based in Erewash Borough
  • Taxi drivers must hold a licence issued by Erewash Borough Council.

Eligibility

All businesses are required to self-certify that they meet all eligibility criteria. The council will undertake pre-payment checks on all applications, which are not limited to new applicants, before any ARG payments are issued. This will as a minimum look at both the company and the company’s bank account.

Applications will be managed to ensure that all payments can be made by the 30 June 2021 at which date the scheme will end (or sooner if funding has been spent).

The ARG Phase 2 scheme aims to support businesses from all affected sectors that may have been severely impacted by restrictions, but are not eligible for the Restart Grant Scheme. Including:

Non-essential retail, hospitality, leisure, personal care and accommodation sectors and associated supply chain providers, group travel and tour operators, other tourism businesses, B&B’s, animal boarding, event industry suppliers, wholesalers, English language Schools, breweries, freelance and mobile businesses (including caterers, events, hair, beauty and wedding related businesses), wraparound care providers, and other businesses that may have not received other grant funding. This list is not exhaustive and grants will be issued based on local economic needs as assessed by the council.

Phase 2 of the ARG scheme is available for those businesses within the above sectors which do not appear on the local rating list. Businesses which do appear on the rating list but do not qualify for the restart may also be considered subject to meeting eligibility criteria.

This funding cannot be used as a wage support mechanism for employees or owners of a business.

ARG funds should not be used to acquire, upgrade or maintain physical assets.

Business Size

Non-essential services and retail, Takeaways not rateable including wholesale and Supply chain up to £6,000

Non rateable Hospitality, accommodation, leisure, personal care, whole sale and supply chain up to £18,000

Market Traders, Taxi Drivers licensed by EBC,

And

Sole trader and freelance home based business, Mobile Business with fixed costs under £100 per month.

£500

Sole trader and freelance home based business, Mobile Business with fixed costs between £100 and £250 per month.

Micro Business with fixed costs under £250 per Month

£1000

Micro business with 1-4 employees or

with fixed costs over £250 -£999 per Month

£1500

£2500

Micro business with 5 – 9 employees

Or with fixed costs over £1000 per Month

£2667

£8000

Small business with 10 - 25 employees or with fixed costs over £5000 per Month

£4,000

£12,000

Small business with 26 – 49 employees

Or fixed costs over £15,000 per Month

£6000

£18,000

Definitions of business included in the Phase 2 ARG scheme: Non-essential retail definition

For the purpose of the ARG Phase 2 scheme a non-essential retail/service business can be defined as a non rateable business that is used mainly or wholly for the purposes of retail sale or hire of goods or services by the public, where the primary purpose of products or services provided are not necessary to the health and well-being of the public. This may include pet boarding, vehicle sales and services, repairs and maintenance, driving instructors, tourism and travel industry, (not an exhaustive list).

Businesses which operate within the non-essential supply chain and do not qualify for the restart grant will also be considered for an ARG Phase 2 Grant.

Takeaways

A non rateable business which provides a food takeaway service and street food businesses will be considered for the phase 2 ARG grant

Leisure definition

A non rateable business that provides opportunities, experiences and facilities in particular for culture, recreation, entertainment, celebratory events, days and nights out and betting and gaming, businesses which operate within the leisure supply chain and do not qualify for the restart grant will also be considered for an ARG Phase 2 Grant

Hospitality definition

A non-rateable business whose main function is to provide in person food and drink services to the general public, alongside businesses which operate within the hospitality supply chain and do not qualify for the restart grant will also be considered for an ARG Phase 2 Grant.

Accommodation definition

A non rateable business whose main lodging provision is used for holiday, travel and stays for work or leisure purposes. Businesses which operate within the accommodation supply chain and do not qualify for the restart grant will also be considered for an ARG Phase 2 Grant.

Personal Care definition

A business which provides a service, treatment or activity for the purposes of personal beauty/hair/grooming/body care/aesthetics and wellbeing, this may include in person holistic, beauty and hair treatments, tattoos and piercings, close contact services. Businesses which and operate within the supply chain will also be considered for an ARG Phase 2 Grant.

Gym and Sports definition

A non rateable business where physical exercise or training is conducted on an individual or group basis using exercise equipment or open floor space with or without instruction. The business offers in person exercise and sport activities to the general public. The business is open to members of the public paying an entry/membership fee. Businesses which operate within the supply chain will also be considered for an ARG Phase 2 Grant. Home gyms, exercise studios, sports courts and sport grounds will not be considered eligible.

Businesses that do not pay business rates should apply to the Local Authority where the business is located. For example, if the business is based in one Local Authority but registered in a different Local Authority, then it would apply for a grant from the LA where it is based. For mobile businesses, businesses should apply for a grant from the LA where they conduct their main business activity.

How to Claim

Eligible businesses who received an ARG phase 1 support grant need not reapply, a single one-off grant will be made to those businesses who have qualified for and received the phase 1 ARG grant and meet the criteria for Phase 2.

Businesses that have not received a phase 1 grant can apply for an ARG phase 2 grant online through My Erewash. Registering for an account is quick and easy, and you will be able to track the progress of your claim. 

Evidence required to support your claim

In order to claim, you will need to provide evidence of your business expenditure and loss of income over 20% the following items could be provided;

 Business Bank Account Details – this is the account we will pay the grant into

  • Bank Statements – the three most recent statements, or screenshots of online banking for the past three months, showing:
  • The business bank details
  • Business transactions during this period
  • Income over the 12 months
  • Proof of annual business premises costs – such as copies of a lease, agreements, and three months’ worth of utility bills
  • If you have no fixed premises costs you could provide copies of bank statements showing at least three months’ worth of business payments being made.

You will also be asked about payments you have received from the Coronavirus Job Retention Scheme (furlough) and the Self-Employment Income Support Scheme.

We may ask you to provide further evidence, such as tax returns and proof of a reduction in business turnover, before we process your claim.

You will need to upload electronic copies, scanned images or clear photos of the proof needed to support your claim.

Over subscription

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

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.

Micro Businesses

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

  • Turnover of not more than £632,000
  • Balance sheet total not more than £316,000
  • Number of employees less than 10 employees

Small Business

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

  • Turnover of not more than £10.2million
  • Balance sheet total of not more than £5.1 million
  • Less than 50 employees

We may request evidence that your business meets the requirements of a small or micro business before we can process your claim.

Business Rates

To qualify for this grant your business must not be registered for Business Rates. This means that the place you run your business from doesn’t fall into the business rates system such as a market stall or space within premises where someone else is liable for the business rates.

If your business is registered for business rates and qualifies for a restart grant you will not be considered eligible for a Phase 2 grant even if you do not apply for the restart grant.

If your business is registered for business rates but does not qualify for a restart grant you will be considered eligible for the Phase 2 ARG subject to meeting the eligibility criteria detailed above.

If your business should be registered for business rates, or of it is registered but you don’t have a charge to pay, you are not entitled to claim this grant.

Fraud

The Government will not accept deliberate manipulation and fraud. Any business caught falsifying their records to gain additional grant money will face prosecution and any funding issued will be recovered, as may any grants paid in error.

Prior to any payments being made, the government has told all local authorities to perform a series of mandatory checks, which we are now in the process of carrying out. These checks include:

  • The validity of the business bank account
  • Confirmation that the business is still actively trading.

Subsidy allowance

 The new domestic subsidy allowance for the COVID-19 business support grants took effect on 4 March 2021. Applications made prior to that date are subject to the previous rules.

This scheme is covered by three subsidy allowances:

  • Small Amounts of Financial Assistance Allowance– you’re allowed up to £335,000 (subject to exchange rates) over any period of 3 years
  • COVID-19 Business Grant Allowance– you’re allowed up to £1,600,000
  • COVID-19 Business Grant Special Allowance- if you have reached your limits under the Small Amounts of Financial Assistance Allowance and COVID-19 Business Grant Allowance, you may be able to access a further allowance of funding under these scheme rules of up to £9,000,000, provided certain conditions are met

Grants provided in excess of the Small Amounts of Financial Assistance Allowance may not be granted to applicants that were defined as 'an undertaking in difficulty' on 31 December 2019. In derogation to the above, grants can be granted to micro or small enterprises that were already in difficulty on 31 December 2019 provided that they are not subject to collective insolvency proceedings.

For the avoidance of doubt, grants under the Small Amounts of Financial Assistance Allowance, the COVID-19 Business Grant Allowance and the COVID-19 Business Grant Special Allowance may be combined for a potential total allowance of £10,935,000 (taking into account all grants previously received under the COVID-19 business grants schemes and subject to the exact amount applicable under the Small Amounts of Financial Assistance Allowance using the Special Drawing Right calculator)

An 'undertaking in difficulty' definition:

‘Undertaking in difficulty’ means an undertaking in respect of which at least one of the following circumstances occurs:

  1. In the case of a limited liability company (other than an SME that has been in existence for less than three years) where more than half of its subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital. For the purposes of this provision, ‘share capital’ includes, where relevant, any share premium.
  2. In the case of a company where at least some members have unlimited liability for the debt of the company (other than an SME that has been in existence for less than three years) where more than half of its capital as shown in the company accounts has disappeared as a result of accumulated losses.
  3. Where the undertaking is subject to collective insolvency proceedings or fulfils the criteria for being placed in collective insolvency proceedings at the request of its creditors.
  4. Where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee or has received restructuring aid and is still subject to a restructuring plan.
  5. In the case of an undertaking that is not an SME, where, for the past two years: the undertaking's book debt to equity ratio has been greater than 7.5 and the undertaking's EBITDA interest coverage ratio has been below 1.0.

Previous State Aid Rules

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. The Local Authority must be satisfied that all State aid requirements have been fully met and complied with when making grant payments, including, where required, compliance with all relevant conditions of the EU State aid Regulation, the EU Commission Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak, the approved Covid-19 Temporary Framework for UK Authorities, and any relevant reporting requirements to the EU Commission.

Payments made can be provided under the existing De Minimis rules, provided doing so does not exceed the €200,000 threshold1 to any one organisation over a three-year fiscal period. Payments made where the De Minimis threshold has been reached should be paid under the Covid-19 Temporary Framework for UK Authorities (threshold €800,000).

The amended Temporary Framework enables EU Member States to give up to the nominal value of €800,000 per company (€120,000 per undertaking active in the fishery and aquaculture sector or €100,000 per undertaking active in the primary production of agricultural products). This can be combined also with so-called de minimis aid (to bring the aid per company to up to €1 million) and with other specific types of aid. Any business that has reached the limits of payments permissible under the De Minimis, the UK Covid-19 Temporary State Aid Framework, and all other UK schemes under the terms of the European Commission’s Temporary Framework will not be able to receive further grant funding.

Annex B of this guidance contains two sample declarations which Local Authorities may wish to use with either payments under the De Minimis rules or under the Covid-19 Temporary Framework for UK Authorities. Where Local Authorities have further questions about De Minimis or other aspects of State aid law, they should seek advice from their legal department in the first instance.

On 13 October 2020 the European Commission announced further amendments to its State aid Temporary Framework - introducing a new measure enabling further support to companies facing a decline in turnover during the eligible period of at least 30% compared to the same period of 2019 due to the coronavirus outbreak. The support can be provided for up to 70% (90% in case of micro and small companies) of the beneficiaries' fixed costs that are not covered by their revenues or other specified sources, up to a maximum amount of EUR 3 million per undertaking.

The aid under this measure cannot be cumulated with other aid for the same eligible costs and is subject to further conditions set out in the Temporary Framework. The UK Government has notified the European Commission of its intention to use the new provision and must await approval from the European Commission to do so. The Covid-19 Temporary Framework for UK Public Authorities will need to be amended before aid under this new measure may be provided. All Local Restrictions Support Grants guidance documents will be updated to reflect the new provisions if and when they are applied to the LRSG schemes once the UK Government has approval. See announcement on the European Commission website.

Tax implications

Grant income received by a business is taxable. The Additional Restrictions Grant will need to be included as income in the tax return of the business.

Privacy Notice 

For information on how we treat the data you provide to us when applying for a business grant, please see the Covid Business Grants Privacy Notice on our Privacy Notice page