B&B Blog

News and updates from the Bed & Breakfast Association

Tuesday 12 May 2020

The £617 million Grant Fund for Council Tax paying B&Bs

This is an update on where things are with the £617m fund - as we know many are desperate for information:

As the UK trade association for B&B and guest house owners, the B&B Association is here to "fight the corner" of B&Bs - so when the original Government help schemes for Covid-19 came out back in March, we immediately started lobbying Government to fill in the "gaps" in the first schemes.

An early one was the self-employed - which many B&B owners are.  The Government later launched its Self-Employed Income Support Scheme (SEISS), to provide support to the self-employed, based on their last three years' average earnings.

But another big gap was B&Bs paying Council Tax rather than Business Rates. The original grant scheme for small hospitality businesses was based on business rateable value, so was no help to those who only pay Council Tax - as 51% of our members do. 

So, from 23rd March we spent six weeks lobbying Government for grants to be extended to Council Tax paying B&Bs.  Eventually on Saturday 2nd May, the Government announced a new "top up" grant fund of £617 million, which was prioritised for (amongst others) "bed and breakfasts that pay council tax rather than business rates".

So far, so good - but a leaked internal Government document about the fund seemed to imply that any business that was "eligible" for the previous grant schemes or SEISS might not be eligible for the new fund. 

This would not be good news for those who might be eligible for SEISS but not get much at all from it because they did not make much taxable profit (SEISS would pay 80% of the total of three average months' taxable self-employed income - averaged across the whole year). 

Another battle to fight!  We explained these issues to Government, and strongly pressed for "eligibility" for SEISS not to rule out applicants for the new fund. It would be better for each business to be able to choose which to apply for, depending on their circumstances.

It was encouraging when Oxford City Council put out a paper about the fund which had changed the condition to exclude those "already in receipt of.. SEISS". 

But we still (as of today, 12 May) do not know what mandatory Terms & Conditions (T&Cs) the Government (BEIS, under Alok Sharma) is imposing on local authorities as regards the fund. As we tweeted on 7 May, we were told that BEIS was due to issue directions to local authorities this week (w/c 11 May).

Local authorities are being given their share of the £617 million, and will distribute the fund to businesses and have "discretion" over it.

So for each B&B, it is the T&Cs set out by their own local authority which matters.  We advise all B&Bs paying Council Tax to check your local authority's website now and daily over the next few days, as applications could open any time now for this fund.  Indeed some local authorities might already have opened them.  You would be well advised to apply as soon as possible, as funds are limited.  Local authorities will not be contacting everyone who may be eligible (several have asked us for lists of every B&B in their area, as they don't have lists themselves!).

The Government have told us that their key aim in designing their various support schemes has been that for any individual business affected by Covid-19, one Government support scheme will help them. This might be the Job Retention Scheme (for employers, today extended until October), SEISS (for the self-employed), the Coronavirus Business Interruption Loan Scheme (CBILS), the Small Business Grant Fund or Retail, Hospitality & Leisure Grant Fund (both for Business Rate paying businesses), or the £617m grant fund we've described above (for Council Tax paying B&Bs missing out on other help), or the "Bounce Back Loans": fast-track loans, "paid in days", 100% guaranteed by Government with nothing to pay for 12 months (£8.4 billion of these 'Bounce Back Loans' have already been paid out to nearly 270,000 small businesses since the scheme launched last week).

(Other help includes HMRC giving extra time to pay VAT and other tax.)

Unfortunately in reality there are many anomalies and unfairnesses in the way different types of business have been able to access financial assistance, but the Government's stated objective is that at least one of the above help schemes should help your business survive through the lockdown so it can open again in the Summer, when "Step 3" of their "Recovery Strategy" is reached (on 4th July at the earliest).

Good luck in your applications to your local authorities - do let us know how they go.

Our subscribing members will be kept fully up to date as always - keep an eye on your email inbox.   And if you're not already a member, your joining options are here. You can join us for as little as £19 for three months from the start of the month after you sign up.

UPDATE 13 May:
The official Government guidance to local authorities from BEIS has now been published for the "Local Authority Discretionary Grants Fund" (LADGF).
The key paragraph on eligibility is:

29.This grant funding is for businesses that are not eligible for other support schemes. Businesses which have received cash grants from any central government COVID-related scheme are ineligible for funding from the Discretionary Grants Fund. 

Such grant schemes include but are not limited to:
  • Self Employment Income Support Scheme
  • Small Business Grant Fund
  • Retail, Hospitality and Leisure Grant
After such a long wait for this "clarification", the above is infuriating, as the wording is sloppy & contradictory. The first sentence of the key para talks about eligibility for other help, but the next sentence says businesses who “have received” cash from other schemes are ineligible. How local authorities interpret that is key.

For what it's worth, our interpretation is that the first sentence is a preamble and not legalistically worded - just an opening statement saying that the LADGF is (in principle) for businesses who have not yet received Government help. We think the second sentence (which we put in bold above) is the key one. That would imply that if you were eligible for SEISS but knew you wouldn't get much from it, you could choose not to apply for SEISS, and apply for the LADGF from your local authority instead.

That is only our interpretation though, and what matters is how each local authority translates the above central Government guidance into its own T&Cs for the grant.

As we advise above, check your local auhority's website now and daily until details about the LADGF appear - and do let us know what your local authority allows.