LRSG: the post-lockdown financial support available to businesses

Pubs required to restrict alcohol to customers who buy meals can claim compensation

(Image credit: © ZUMA Press Inc / Alamy)

published 11 December 2020

While England’s second national lockdown ended last week, the country’s return to tiered restrictions has left many businesses struggling to trade, particularly in the hospitality sector.

It is crucial that these businesses claim all the support to which they are entitled. In addition to the extension of UK-wide initiatives available to all businesses struggling during the pandemic, including the Job Retention Scheme and the two state-backed loan programmes, the Local Restrictions Support Grant (LRSG) offers additional help for English businesses in Tier-two and Tier-three areas.

Business rates are key

Administered by local authorities, this scheme pays cash grants based on the rateable value (used to determine business rates)of the properties that eligible businesses occupy, with different levels of award on offer depending on whether you’re open or closed.

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The first level of grant applies to firms that have been able to reopen since the lockdown, but are losing trade owing to the ongoing restrictions. This might include pubs required to serve alcohol only with meals, for example, and restaurants that can’t serve groups indoors other than people from the same household. Firms in this group and in a property with a rateable value below £15,000 may be entitled to up to £467 for each 14-day period their business is affected, rising to £700 for businesses with properties valued between £15,000 and £51,000, and to £1,050 above this threshold. Your local authority’s website should explain how to claim.

More generous awards are available to businesses forced to close under Tier-two or Tier-three restrictions, such as pubs that do not serve food. For these firms, the grants rise to £667, £1,000 and £1,500, according to the rateable value of their properties. The same help is also available to businesses that closed at the beginning of the first lockdown at the beginning of March and have never been allowed to reopen, although these grants are not retrospective past 1 November. Such businesses include nightclubs and adult-entertainment venues.

Since all the grants under the LRSG are based on the rateable value of businesses’ properties; firms that do not pay business rates miss out. But if you don’t pay rates, yet are still hampered by Tier three, your local authority may still be able to offer support under the Additional Restrictions Grant. Finally, make sure you have also applied for any support you are due for England’s second lockdown between 5 November and 2 December. Businesses that had to close were entitled to cash grants of up to £3,000, with the sum again calculated with reference to business rates.

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David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.