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COVID-19 Restrictions Fund from Scottish Government

Further details of the new £40m COVID-19 Restriction Fund from the Scottish Government have been released.

16th October 2020

Further temporary measures to stop the spread of coronavirus came into effect from Friday 9 October.

The new restrictions, backed by a new support fund of up to £40 million for business and the existing UK Job Retention Scheme, will be in place nationwide for 16 days, with tighter restrictions across central belt areas where the infection rate is highest.

The new support fund of up to 40 million

A budget of up to £40 million has been earmarked to support employees and businesses impacted by these restrictions consistent with our established commitment to sustainable and inclusive growth and the Coronavirus (COVID-19): fair work statement.

We will work with the STUC, employer organisations and HMRC to deliver targeted support to employees as we recognise that employers are now liable for 20% of salary costs for furloughed workers.

We will also provide support to businesses closed or impacted by these new restrictions - see below for more detail.

The Scottish Government will also work with business and sector representative organisations to provide additional support flexibly through a new £11 million contingency fund for businesses that need support but do not fall into the above categories.

These new and temporary business support funds will be administered by Local Authorities, providing one-off grants to businesses very directly impacted by the restrictions implemented on 9 October 2020.

A COVID-19 Restrictions Fund will be available to hospitality and other businesses required to close (except for takeaway) by these new restrictions regulations. It operates as a two-tiered scheme, with a smaller grant of £2,000 for businesses with a Rateable Value (RV) of under £51,000 and a larger grant of £3,000 for those businesses with a RV over £51,000. An upper limit of £15,000 in total will apply to any eligible business operating multiple premises.

At the same time, Local Authorities will invite applications for a business hardship fund - with payments of £1,000 or £1500, dependent on Rateable Value - to support some businesses that remain open but are still significantly impacted by the restrictions, including those in the direct supply chains of firms that must close. An upper limit of £10,000 will apply in total to any eligible business operating multiple premises.

There is a finite budget available for this support and we wish to do all we can to minimise the risk that applications from businesses exceed the funding available. Therefore we will target the first round of applications on:

  • Hospitality businesses and some gyms, required by these new regulations to close or operate in a restricted way and able to 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 able to evidence a minimum 25% reduction in turnover during the brake period

For clarity, 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.

Eligibility

To be eligible for this support you must meet the following criteria.

For the business closure fund you must be a hospitality or other business required by law to close under these new restrictions.

For the discretionary business hardship fund you must be:

  • a hospitality business and some gyms, required by the regulations to operate in a restricted way;
  • a producer/wholesale business 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 able to evidence a 25% reduction in turnover during the brake period.

If your business operates multiple premises you can apply for grants for each premise, applying only once to the local authority in which your business is headquartered. The maximum any one business can receive will be restricted, regardless of the number of premises: the upper limit for the business closure fund is £15,000; the upper limit for business hardship fund is £10,000.

Your businesses must have been open and trading before 9 October.

You must have a business bank account. This is the account your grant will be paid into if your application is successful.

Your business premises must be registered for Non-Domestic rates. Businesses that pay rates through their landlords rather than directly to a Council are eligible to apply (evidence to be provided through copy of lease agreement).

Businesses which have breached wider COVID regulations/requirements prior to local restrictions are not eligible to apply.

Businesses with connections to tax havens, as set out in the Coronavirus (Scotland) (No.2) Act 2020, are not eligible to apply.

Applications are welcome from Limited Companies, Sole Traders, Trusts and Partnerships provided they meet the other criteria.

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.

How to apply

The Scottish Government are working with local authorities to prepare and finalise all the administrative arrangements required to ensure efficient and effective application, processing, payment and appeal arrangements - and access to the information and advice you may need.

Local authority websites will be updated at 9am on Tuesday 20th October 2020, allowing business to complete applications. At this point in time there is no merit in contacting your local authority.

Applications will close on Tuesday 3rd November at 5pm.

Local Authorities will prioritise processing of applications with a view to making as many decisions as possible within the brake period while restrictions are in place. Local authorities will ensure any payment is made within 3 working days of notifying you of their decision.

Local authority websites will provide information on appeal arrangements.