Additional Restrictions Grant 2 (ARG2) Guidance

Back to Business Fund Guidance

Back to Business Fund (Additional Restrictions Grant 2) Guidance

Background

  • On Thursday 13 May 2021, a new Back to Business Fund was launched for businesses in Sutton. The scheme will close for applications on 30 June, or earlier if demand exceeds the funding which is available. 

  • The main aim of the new Back to Business Fund is to support businesses severely impacted by the recent coronavirus restrictions. The funding is provided by the Department for Business, Energy and Industrial Strategy (BEIS). 

  • Please ensure you read all the following information carefully before applying for this funding. All applications will be assessed against the criteria set out. Submitting an application or meeting the criteria set out does not guarantee funding will be awarded. 

  • The London Borough of Sutton reserves the right to vary the terms of the scheme and amend the guidance at any time, and without notice, should it be necessary to do so, including to ensure compliance with Government guidance. All grants are provided at the discretion of the London Borough of Sutton. 

  • Applicants which qualified under the previous ARG scheme (which provided grants for November 20 to February 21) will be asked to complete a short application / declaration form to apply for this scheme. This will be issued directly to them. Funding through the initial ARG scheme does not guarantee that funding will be provided through ARG2. 

  • New applicants will be required to submit a full application form and submit evidence. 

To apply, you will need details about your business such as your contact details, turnover, bank details and the date you started trading. You will also need to provide information on any other COVID-19 grants, State Aid or Subsidy you have received (if any). 

You can save your application, and return to it by selecting the "save" button at the top of the form. The application deadline for the Back to Business grant has a final extension until 30 June 2021. This is to bring the closing date for the scheme in line with the Government's application deadline for the Restart grant. Please make sure you submit your application by 30 June 2021. 

  • You will be asked to upload the following evidence as part of your application:
  • All applicants - Full March or April 2021 bank statement from the account you use to run your business 
  • If you are based in a commercial property - You will need either your Business Rates number and rateable value OR if you are not liable for Business Rates, evidence of your commercial rental agreement such as a rental invoice, agreement or lease 
  • If you are a limited company - Your last set of audited accounts and a profit & loss 
  • If you are self-employed - Your full 2019/20 Self Assessment Tax Return Form including the self-assessment supplementary pages
  • If you started trading recently and cannot provide accounts or your self-assessment tax return, please provide at least two additional bank statements to demonstrate you meet the minimum turnover threshold of £6,000 per year (or pro-rata) 
  • Please apply here.

Exclusions

This scheme is not available to businesses that have received or are eligible for the Restart Grant for the relevant business premises for the same period of time.

Before applying, please first check if you are eligible to receive the Restart Grant.

Grants available

Businesses must meet all criteria set out to qualify. 

Lower Tier

Businesses in the following sectors may receive grants as set out below:

  1. Non-essential retail (as set out in the full Restart Grant guidance).

  2. Any other sector with a 30% loss of turnover in March or April 2021. 

  • Businesses which are based at home or are mobile may receive a payment of £1,500.

  • Businesses with a rateable value or fixed annual property costs of exactly £15,000 or under may receive a payment of £4,667.

  • Businesses with a rateable value or fixed annual commercial property costs of over £15,000 and less than £51,000 may receive a payment of £7,000. 

  • Businesses with a rateable value or fixed annual commercial property costs of exactly £51,000 or over may receive a payment of £10,000. 

Higher Tier

Businesses in the following sectors may receive grants as set out below:

  1. Hospitality, accommodation, leisure, personal care, gym and sports (as set out in the full Restart Grant guidance).

  2. Group travel/tour operators, tourism and leisure, coach operators, kennels and catteries

  3. Theatre, performing art and music venues, and businesses which can evidence  they generate the majority of their income by directly supplying these sectors (ie set-designers, lighting/sound technicians, make-up artists, theatre groups), and TV and film production

  4. Wholesalers and breweries, and businesses which can evidence they generate the majority of their income by directly supplying sectors forced to close during the national lockdown from January-April 2021 (ie hospitality and leisure)

  5. Businesses which can evidence they generate the majority of their income by organising and supplying events including caterers, event photographers, event hair or beauty and weddings 

  6. Businesses which generate the majority of their income from providing indoor group-based classes and have been restricted in their provision of these services. 

  7. Early years childcare and education provision which is Ofsted registered. 

  • Businesses which are based at home or are mobile may receive a payment of £2,500.

  • Businesses with a rateable value or fixed annual property costs of exactly £15,000 or under may receive a payment of £10,000.

  • Businesses with a rateable value or fixed annual commercial property costs of over £15,000 and less than £51,000 may receive a payment of £15,000. 

  • Businesses with a rateable value or fixed annual commercial property costs of exactly £51,000 or over may receive a payment of £22,000. 

Summary 

By applying, you accept the information set out within this Guidance. 

  • The grant is provided to support the business, not to support the wages of the employees or owners of a business, to pay personal costs or dividends. It should be used to cover the costs incurred by the business, including to make the business COVID-19 secure.

  • Grants will only be awarded to businesses that have suffered and can evidence a loss of income due to COVID-19 restrictions which exceeds the grant funding awarded. If you have adapted your business model, received alternative financial support, the HMRC Job Retention Scheme, Self Employment Income Support Scheme payments, insurance payments or reliefs which mean you would be  financially better off after receiving the grant funding than you were prior to COVID-19 restrictions, you are not eligible to apply. If you do, you will need to repay the funding awarded. Payments and benefits to support you as an individual rather than support your business are not classed as support for your business (with the exception of SEISS).  

  • If you have any queries please contact discretionarygrant@sutton.gov.uk.  As we are a small team we do not currently have a contact phone-number, but we can arrange a telephone call where appropriate. Please either email us to arrange a call-back, or you can phone our Contact Centre on 0208 770 5000 who will pass on your details. 

Eligibility 

To be eligible, you must be able to demonstrate that you meet all the criteria set out below:

  • You must evidence that your business turnover was at least £6,000 prior to COVID-19/March 2020 excluding loans, funds transfers and grants; or pro-rata if a newly established business. 

  • If your business started recently and has not received £6,000 business income to date, your application may be considered if you are based in a commercial property and can evidence significant ongoing financial commitments (ie property costs). This does not apply to home based or mobile businesses. 

  • All types of organisations can apply including, but not limited to, sole traders, partnerships, limited companies, charities, community interest companies and limited liability partnerships. Businesses must be appropriately registered with Companies House, and sole traders/partnerships with HMRC. 

  • You must be a sole trader, partnership or a small, micro or medium businesses and meet two of the following definitions:

    • your annual turnover must be no more than £36 million

    • your balance sheet total must be no more than £18 million

    • your average number of employees must be no more than 250 

 

  • Your business must be fully constituted and trading, and have been established before 1 April 2021. If your business is currently shut, you must plan to reopen after restrictions are lifted. A business is considered to be trading if it is engaged in business activity (i.e. carrying on a trade or profession, or buying and selling goods or services in order to generate turnover). Some indicators that your business is trading are shown below: 

    • Your business has staff on furlough

    • Your business continues to trade including through alternative methods such as online i.e. click and collect services or takeaway

    • Your business is engaged in business activity; managing accounts, preparing for reopening, planning and implementing COVID-safe measures.

 

  • You must not be in administration, insolvent, have applied to be removed from Companies House or have had a striking-off notice made, either during the grant’s eligible period, at the point of application, or when the grant is due to be paid. Your Confirmation Statement and Accounts must not be overdue at Companies House at the point of application or prior to the grant being awarded.

  • You must have a trading/operating address in the London Borough of Sutton as of 1st April 2021, and regularly operate in the London Borough of Sutton. 

  • Eligible businesses may receive one grant for each commercial business premises/address/hereditament within the London Borough of Sutton that they occupy, operate from on a full time basis and for which a separate rateable value or fixed costs are incurred which exceed the grant award. Rental of a storage unit is not classified as a rental of a commercial business premises.

  • If you fully occupy a rated premises, the grant will be paid to the person that is liable for Business Rates for the premises. 

  • Home-based and mobile businesses are eligible to apply if the owner lived in the London Borough of Sutton on 1st April 2021; and the business does not substantially trade from another borough. Mobile businesses may also be considered where they can submit evidence that they exclusively operate in the London Borough of Sutton. If eligible, the business would be able to access one grant per business.

  • You must not have received a grant from another local authority in relation to the premises you claim through this scheme; or a grant from another local authority if you are applying as a home-based or mobile business. 

  • For the purpose of assessing the loss of income, the business turnover in either March 2021 or April 2021 will be compared to the average monthly turnover from 2019/20; or any average three month consecutive period between April 2020 and February 2021. Any funds from the Self Employment Income Support Scheme or the HMRC Job Retention Scheme will be classed as income during the current period, as this grant funding is not repayable.

  • The grant should be used to cover the costs incurred by your business, excluding staffing and salary costs. Eligible costs could include:

    • Fixed commercial property costs

    • Ongoing storage costs 

    • Dedicated business phone or internet 

    • Business transport/vehicle fixed costs e.g. tax, insurance, service or fixed lease/hire costs

    • Business software subscription licenses

    • Business/Professional Body registration and membership costs

    • Training costs which are required by law or required by your business/professional body

    • Fixed franchise payments

    • Business utilities

    • Business banking charges, book-keeping, accounting services 

    • Equipment, supplies and resources required in order to run the business

    • Adaptations you must make to ensure your business is COVID-19 compliant

 

  • Shared business/personal costs are not classed as fixed business costs for this purpose. For example, the costs of residential property, utilities, insurance, and personal vehicles are not eligible, even where these are partially used for business purposes and the costs partially recharged to the business. Staff costs, salaries, bonuses, dividends, consultant fees etc. are not eligible. This list is not exhaustive. 

  • The person completing the application must have authority to act on behalf of the company or trader that the application is being submitted for. If you are a limited company (or similar) and are not named as a Director or person with significant control on Companies House you must provide contact details of a Director on request and confirmation they have approved the application. In certain scenarios we may ask for evidence of this authority. 

Note: Eligible businesses that meet the criteria above are not guaranteed funding through this discretionary scheme.

Further information 

  • You must provide the relevant documentation as set out in the evidence page here.

  • The government will not accept deliberate manipulation and fraud - any business caught falsifying their records to gain grant money will face prosecution and any funding issued will be subject to claw back, as will any grants paid in error. 

  • If it is later identified your payment has been made in error (as a result of either party) you will be required to refund the grant payment made. 

  • Please be advised that you may be contacted for research purposes by the London Borough of Sutton, the Government or their third parties. Your data will be held, processed and retained securely by the London Borough of Sutton for a period of 10 years following the closure of the ARG fund in line with government guidelines. It will be shared with other teams across the Council and third parties for the purpose of assessing, verifying and processing your application, reporting, responding to statutory requests, post-payment monitoring and for the detection and prevention of fraud and error. This includes checks on your bank account / details conducted through the National Fraud Initiative (NFI). Your information will be shared with others, including the Department for Business, Energy and Industrial Strategy, Her Majesty's Revenue and Customs Service and their third parties for reporting, monitoring, evaluation and fraud detection purposes. If a grant is awarded, details will be published through the London Borough of Sutton’s website. Information will be released as required by legislation such as Freedom of Information. The London Borough of Sutton’s full privacy notice is available at Sutton.gov.uk.

  • To be eligible for a grant award, businesses must have appropriate licences, certification and be operating in accordance with industry or government regulations, and will not be considered if they are in breach of any contraventions. Businesses must be compliant with COVID-19 legislation, guidance and secure/safe working regulations. 

 

  • The payment band will be based on: 

    • The rateable value of the commercial property on 1st April 2021 (where this is available) if the applicant is the ratepayer.

    • If the applicant is not a ratepayer, the evidenced fixed annual commercial property rental/mortgage costs including VAT will be used.

    • If the business is not based full-time within a commercial property, it can still be supported through the fund if its costs (excluding staffing) exceed the grant provided.

    • Where appropriate payment bands will be determined based on the evidence provided. 

 

  • If your circumstances change after you submit your application, you are required to notify us at discretionarygrant@sutton.gov.uk

  • The government has provided the ARG as a fixed allocation to Sutton Council. If there is significant demand, not all eligible businesses applying will receive funding. 

  • If funding remains following this round, the London Borough of Sutton may choose to reopen the fund, potentially with varied eligibility criteria or priorities. It may alternatively or alongside this choose to offer top-ups to original grant awards for all or certain categories of businesses. 

Subsidy Allowances and funding requirements

  • Grant income received by a business is taxable. The Back to Business Fund (Additional Restrictions Grant) will need to be included as income in the tax return of the business. Only businesses which make an overall profit once grant income is included will be subject to tax. Payments made to businesses before 5 April 2021 will fall into the 2020/21 tax year. Payments after 6 April 2021 will fall into the 2021/22 tax year. Unincorporated businesses will be taxed when they receive the grant income.

  • 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 under these three allowances can be combined for a potential total allowance of up to £10,935,000 (subject to exchange rates).

    • Further information is available here.
       

  • You will need to declare the Subsidy you have received as part of your application and which allowance you are covered through. 

  • If your application is successful, we will ask you to complete and sign a Subsidy declaration prior to the grant payment being made.