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Frequently asked questions - round 2 | Discretionary business grants | Birmingham City Council

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Frequently asked questions - round 2

Where can businesses find out about the Discretionary Business Grants criteria and Application Form?

If a business has already received a Small Business Grant/Retail Hospitality and Leisure Grant/Rural Rates Relief Grant, then can it also apply for a Discretionary Business Grant?

No, if the business has been awarded a Small Business Grant or a Retail Hospitality and Leisure Grant, then the business will be ineligible for a Discretionary Business Grant.  The purpose of the Discretionary Business Grant is to widen access to support those businesses struggling to survive the Covid-19 shutdown, that were unable to access other grant funding schemes. If a company has benefited from either of these schemes, then it will automatically be ineligible for the Discretionary Business Grant.

If a business owner is receiving Self Employment Income Support, can he/she still apply for a Discretionary Business Grant?

Yes.  If a business owner is claiming Self Employment Income Support and has incurred commercial fixed property costs, then they would be eligible for consideration for a Discretionary Business Grant.  Receiving Self Employment Income Support does not disqualify a company from applying for the Discretionary Business Grant.

Are businesses who have applied to the Coronavirus Job Retention Scheme eligible for grants?  Does this also apply to businesses that have claimed Statutory Sick Pay for staff sick with coronavirus?

Yes, a business could still apply for a Discretionary Business Grant.  Receiving support from the Covid-19 Job Retention Scheme does not disqualify a company from applying for the Discretionary Business Grant, nor does claiming Statutory Sick Pay for staff.

Do businesses who do not pay business rates, (such as those operating out of shared offices, flexible workspaces, units in industrial parks, science parks) and incubators qualify for consideration?

Yes. The Discretionary Business Grant considers these types of businesses to be a priority and they will be eligible to apply for the scheme. 

Businesses in shared offices may have shared directors, (i.e. two companies trading from same premises). Is there an intention to restrict grants in these cases?

No.  Both businesses can be assessed. The different costs incurred by the companies would have to be identifiable (i.e. the property/utility costs paid by each business for the space).

Will a business have to pay a government grant back at a later stage?

No, the business will not be asked to pay the grant back.  However, should checks discover that payments have been made in error or have been claimed as a result of fraud, then recovery action will be needed.

How much grant funding can a business receive from the Discretionary Business Grant Fund?

There are 3 levels of grant support awarded:

Up to £10k (grants will be awarded up to £9,999 and will be determined on a case by case basis)

£10k and
£25k

The City Council discretion is limited and related to the assessment of significant loss of income (length of closure and loss of income) and awarding grants below £10k.

For example, a business that has continued to incur its usual commercial fixed property-related costs and has been on lockdown since 23 March 2020, will be awarded a higher level of grant funding than a business that has continued to trade on a reduced basis throughout the crisis. 

Why isn’t Birmingham City Council able to pay grants of between £10k and £25k?

The scheme has been designed to reflect the previous two schemes in grant size, however to provide more flexibility to enable Local Authorities to design their own local schemes, Birmingham City Council can award grants of under £10k and we anticipate that many payments made under this scheme will be for sums less than £10k.

Can a business apply, even though it has continued to trade, albeit on a reduced basis during lockdown?

Yes.  A business can still apply and claim a proportion of their commercial fixed costs via the scheme. 

Does a business have to meet all of the eligibility criteria, or will their application be considered if they meet 90% of the criteria?

No.  The business cannot apply unless they meet all of the eligibility criteria.  A business will be asked a series of questions as it completes the application form and if they do not meet the eligibility criteria, then their application submission will not progress any further. 

How do you assess and score the application?

The amount of grant awarded to a business will depend upon the level of commercial fixed property costs that the business usually incurs and how severely the business has been affected by the Covid-19 shutdown. 

For example, a business that has continued to incur its usual commercial fixed property costs and has been on lockdown since 23 March 2020, will be awarded a higher level of grant funding than a business that has continued to trade on a reduced basis throughout the crisis. 

If a business is benefitting from the Small Business Rates Relief on a property during shutdown, can it include the rate costs that would normally be incurred within their application when applying for a Discretionary Business Grant, or should these costs be excluded from their fixed property costs within their application?

We will look at the fixed costs that a business would normally incur over a 12-month period and make a grant award based on the full year’s costs, regardless of whether the company were in receipt of rates relief, or not, so yes, they can be included.

If a business was not trading on 11 March 2020, can it still apply?

No, if a business was not trading on 11 March, they will not be eligible to apply.  Only those business which were trading on this date can be considered.

If a business is in a) administration b) insolvent or c) has a striking off notice against it, can it still apply?

No, companies that fall into these 3 categories are not eligible for funding under this scheme.

This grant has been created to provide support to active businesses. Businesses that were in liquidation or were dissolved as of the 11 March will not be eligible. Businesses that were in administration as of 11 March or those that fall into administration or are dissolved after 11 March and before their grant is paid will also not be eligible.

Can businesses with multiple properties claim multiple grants?  (e.g. can a registered charity with several shops or a market trader with numerous stalls), claim more than one Discretionary Business Grant? 

No, the grant is awarded on a “per business” basis to those companies which fulfil the eligibility criteria.  Businesses with numerous properties/locations will only receive one Discretionary Business Grant.  

Can mooring or marina fees be counted as a 'commercial fixed property cost’ for businesses that involve boat tours, floating restaurants etc?

Yes. This could count as a fixed property cost.

Is the grant payment subject to tax?

Grant income received by a business is taxable therefore funding paid under the Discretionary Business Grant will be subject to tax.  However, only businesses which make an overall profit once grant income is included, will be subject to tax.

Is the grant payment awarded to a business, subject to compliance with State Aid regulations?

Yes.  Any aid provided under this scheme will be relevant if a business wishes to apply, or has applied, for any other aid granted on the basis of the European Commission’s Temporary Framework.  The business will need to declare the amount of grant to any other aid awarding body who requests information from the business on how much aid they have received.  Read the full details about State Aid on the Gov.uk website

How long will it take for a business to receive a Discretionary Business Grant?

The scheme operates on a first come, first served basis, has a limited funding pot and will be open from 2 weeks from 3 August to 17 August 2020. The Discretionary Grant application process has now closed.

Birmingham City Council will commence processing applications from 17 August onwards.  We anticipate an extremely high volume of applications and will endeavour to respond to you as quickly as possible.  However, it may take up to 28 days from the date the application window closes (i.e. by 14 September 2020) before we can respond to you.  This time frame assumes that all information has been completed correctly and full evidence provided. 

What is the timescale that an applicant can expect to receive a response by? 

Birmingham City Council will respond to an application (within 28 days from the date the application window closes) by 14 September 2020, as long as all information has been completed correctly and all evidence provided. 

What is the process if a business has not been contacted within the 28 day timeline? 

On submission of a DBG application, the business will receive a unique reference code which is generated by the successful completion of their application form.

Businesses should wait until the 28 day time line has passed (i.e. 14 September) before contacting the Call Centre on 0121 216 1020 to enquire about their application, quoting their application reference number. 

Market Traders

Are regular market traders eligible for consideration?

Provided that they have commercial fixed property-related costs such as rent, then yes market traders are eligible to apply.

We expect ‘regular’ traders to be those which, before Covid-19 restrictions, traded most days of the week. Traders that only traded in occasional markets (e.g. once a month) would not be considered ‘regular’. 

If market traders operate in more than one Local Authority, can they apply to grants from both?

Yes, a market trader can receive grants from more than one local authority.

Are annual pitch fees and storage costs considered to be 'commercial fixed property costs' for market traders?

Yes, pitch fees and storage costs would count as commercial fixed property costs.

Market traders may have storage premises covered by the Small Business Rates Relief. Is the intention that these are excluded from the Discretionary Grant Fund despite the pitch costs not being covered?

Businesses which have received funding from other grant schemes are not eligible for funding under the discretionary grant scheme

Bed and Breakfasts

Are Bed and Breakfasts which pay Council Tax instead of business rates eligible?

Yes.  Bed and Breakfast establishments are eligible for consideration.

What is classed as a B&B? Does renting a room on Airbnb count?

To be registered for council tax, B&Bs must have fewer than six bed spaces. We would expect properties to be wholly or mainly used as guest or boarding premises. Examples of relevant proof to consider for B&Bs include:

  • Planning permission for change of use;
  • A fire certificate obtained when setting up the B&B to get business insurance policy and public liability cover;
  • A “hotel and mobile units television licence”, which covers up to 15 televisions and can be purchased online from TV Licensing;
  • A music licence from PPL PRS Ltd, if the B&B has a TV in public areas, such as a bar or breakfast room, which has the sound turned on;
  • A personal and premise alcohol licence, if serving alcohol;
  • Registered with local Environmental Health Officer when setting up the B&B to the property assessed.

Renting an Airbnb does not qualify for consideration.

Why has a minimum loss of income threshold of 30% been applied?

Government has given local authorities discretion to determine what a “significant loss of income” is when awarding Discretionary Business Grants.  Birmingham City Council has determined that a 30% minimum loss of income is the threshold which a business has to meet/exceed in order to qualify for consideration.  

Why is there a need for a business to submit 7 months of Bank Statements?

To assess the financial impact that Covid has had on a business and the loss of income it has experienced, the Appraisal Team need to analyse the company’s income prior to 23rd March 2020 and afterwards (ie pre v post lockdown).  This is the reason why we ask for Bank Statements from  December 2019 until June 2020 to calculate loss of income.

Can a business submit Excel Sheets and Word Documents instead of Bank Statements to evidence loss of income?

No.  We are unable to accept supporting evidence created using Excel Spreadsheets or Word Documents as proof of loss of income.  Bank Statements are auditable, legible documents which provide us with independent evidence of income.  Submitting Excel Sheets and Word Documents as evidence will delay your application, result in a request for further information or rejection.

What if a company’s Bank Statements show increased income because it is in receipt of payments from the Government Job Retention Scheme or Loans?  Will the company be penalised for this?

No.  When the Appraisal Team review a company’s Bank Statements, they exclude any Government loans/grants within the loss of income calculation.  To make it clear for the Appraisal Team, it would help if applicants highlighted any loans or grants on the Bank Statements so that these can be easily recognised and omitted from the loss of income calculation.

What are ongoing commercial fixed property costs?  What kind of costs can I include within my application?

An application can include fixed costs such as rent, mortgage payments (if these are attributed to the business), business rates (even if a business is in receipt of business rates relief), service charges, licence, building and contents insurance, utility bills, broadband, storage costs and any other ongoing fixed commercial property costs.

Why can’t a business apply for a Discretionary Business Grant if it doesn’t incur any fixed property costs?

The level of grant awarded to a business is directly attributed to the amount of fixed property costs incurred/evidenced.  If there are no property costs incurred, then the Appraisal Team have no costs on which to calculate a grant award.

Are the fixed commercial property costs calculated exclusive or inclusive of VAT?

The grant will be calculated on the ex-vat value of a business’ commercial fixed property costs as it is not permitted for grants to be paid against expenditure which include VAT.

Can a charity apply for Discretionary Grant Funding in Round 2?

No.  The 2 Round of DBG funding is specifically targeted at small businesses and so charities are not eligible for consideration. 

If a business pays business rates, can it apply for a Discretionary Business Grant?

Yes, it can, but it should apply for a Small Business Grant first and only when its Small Business Grant application has been rejected, should it apply for a Discretionary Business Grant.

Can a business which doesn’t pay business rates, apply for a Discretionary Business Grant?

Yes it can.  The fund is designed to support businesses that do not pay business rates and are in shared space for example.

Is a business which has stalls or properties outside of Birmingham, still able to apply for a Discretionary Business Grant?

If the business operates predominantly in Birmingham, then it is eligible for consideration because it conducts its business for the majority of its time in Birmingham.  If however, the business is based or operates outside of Birmingham, then that business would not be eligible for a grant.   

For example, a market trader who has stalls in other parts of the country for the majority of the week, but only operates from Birmingham for say 1 day per week, would not be eligible because Birmingham is not the predominant place that their business is operated from.  In this instance, the business should apply for a Discretionary Business Grant from the city/town where it primarily trades from.

If a business has applied for a Discretionary Business Grant, when is it likely that it will receive a grant funding decision?

Applicants will receive an email response from the Appraisal Team by 14th September 2020.  It is recommended that businesses do not contact the Call Centre prior to this date to enable the Appraisal Team to work through all of the applications as quickly as possible.

If a business missed the deadline for the submission of their DBG application, will there be another opportunity for a business to apply?

No, It’s highly likely that Round 2 will be over-subscribed and all the grant funding fully committed because the eligibility criteria has been extended to include more businesses.  It is not anticipated that there will be any grant funding remaining at the close of Round 2.   

What happens if a company doesn’t submit all the supporting evidence with their application because it wasn’t available at the time of their submission?

A DBG application can only be fully appraised if all of the supporting evidence is provided by the applicant.  The Appraisal Team will give the applicant an opportunity to provide the missing evidence within 2 working days.  To ensure fairness to DBG applicants in the pipeline and to avoid delays in processing applications, if the information requested is not provided within this timescale, then the application will be rejected. 

If a company is asked to provide additional information, or a more detailed explanation regarding their application, what timeframe will the business need to respond in?

The Appraisal Team will give the applicant an opportunity to provide the missing evidence within 2 working days.  To ensure fairness to DBG applicants in the pipeline and to avoid delays in processing applications, if the information requested is not provided within this timescale, then the application will be rejected.

What happens when a business has applied for a Small Business Grant or Retail, Hospitality and Leisure Grant and hasn’t received a decision, so applies for a Discretionary Business Grant in the interim?  What happens to both of their applications?

Some businesses may have applied for a Small Business Grant or a Retail, Hospitality and Leisure Grant, and are awaiting a funding decision when the Discretionary Business Grant Fund launched.   

As DBG has only a 2 week window in which businesses can apply, rather than disadvantage these businesses, they will be allowed to apply for a DBG whilst they awaited the SBG/RHLG decision.

A company can only be awarded one of the following grants: a Small Business Grant (SBG), a Retail, Hospitality and Leisure Grant (RHLG), or a Discretionary Business Grant (DBG).  

So, in this case, their DBG submission will be held pending a funding decision on their SBG or RHLG application.  (The SBG or RHLG grant application takes priority as there is a larger funding pot available for these two grants).

If the company’s SBG or RHLG application is successful, then it will be awarded either of these grants and their DBG application will be rejected. 

If the company’s SBG or RHLG application is unsuccessful, the DBG Appraisal Team will review the DBG application and inform the business of their decision, subject to funding availability.

Tips when submitting your application

  • Provide an auditable paper trail of evidence.  Explanatory letters and emails are no substitute for evidence
  • Highlight entries on your Bank Statements which relate to Government grants and Job Retention Scheme payments so that they are easily identifiable to ensure that they are omitted from the loss of income calculation
  • Provide a signed/dated lease agreement whenever possible, not just rental invoices
  • If a business pays rent/invoices in cash, then credible evidence needs to be provided in support of this
  • Respond to any requests for further evidence as quickly as possible, as failure to respond could result in your application being rejected