Grant schemes for retail, hospitality and leisure businesses - UK

UPDATED 22 July 2021

There are new grant schemes available across the UK to support businesses in the retail, hospitality and leisure sectors during the Coronavirus outbreak. Under the schemes, eligible businesses will receive a grant of £25,000.

How the schemes work

Under the schemes, you can claim a grant of £25,000. This grant doesn't need to be repaid and you can claim the grant and continue to do business.

In England, funding is expected to be paid by local authorities to eligible businesses automatically. However, we recommend that you visit your local authority website to confirm whether you need to take any action to ensure your local authority has the necessary details to make payment. If you're eligible to receive this grant and you're concerned your local authority does not have bank details to make payment, you should contact your local authority for guidance.

If your business is in Scotland and meets the criteria for the grant, you will need to apply directly through your local authority. To find out more visit https://findbusinesssupport.gov.scot/coronavirus-advice/sources-of-funding and click Local Authorities – Coronavirus grants.

If your business is in Wales, you should visit your local authority website to find out how to receive your grant online.

If your business is in Northern Ireland, advice on how eligible businesses can access this grant is expected to be made available soon at nibusinessinfo.co.uk

Who is eligible

The grants are aimed at businesses who are registered to pay business rates. Criteria are slightly different across England, Northern Ireland, Scotland and Wales.

Process a grant received

Once you receive the grant, you'll need to record it your accounts. We recommend that you create a special ledger account where the grant money is recorded. This helps you trace the amount of the grant received, making it easy to locate and report on, if required.

To record the grant there are two steps:

  1. Create a new ledger account for the grant money received.

    This will help you trace and report on the money received from the grant, as it will appear as a separate item on your management reports.

  2. Record that you've received the grant.

Example

For the purpose of this article we'll use the following example:

  • The company receives a grant of £25,000 on 10 April 2020.
  • The grant is received into the company current account, nominal code 1200.
  • We'll create a ledger account for the receipt using 4970 as the code.

Create a ledger account

  1. From Settings, select Financial Settings, then Chart of Accounts.
  2. Select New Ledger Account and complete the following information:

    Included in Chart

    Leave this selected.

    It makes sure the balance of this account is included on your reports.

    Ledger Name* Enter a name of your choice, such as Retail, leisure and hospitality grant.
    Display Name* This is the name that appears on the reports. Enter a name that makes sense to you, such as Retail, leisure and hospitality grant Income
    Nominal Code*

    For example 4970.

    You can use any number here but it's good practice to keep the numbers in each category consistent, so use a number that's close to you other Other Income accounts. For the default chart of accounts use a number between 4901 and 4999.

    Category *

    Other Income.

    The balance of the account will appear on your Balance Sheet in the Income section.

    The category determines the report and report section where the balance of this account is reported.

    Category Group This defaults to Income and you can’t change this.
    VAT Rate Choose No VAT.
    Visibility

    Leave the defaults selected.

Record receipt of the grant

Record that you received the money as an Other Receipt.

For the purposes of this section we'll use the following example:

  • £25,000 was paid into your bank account on 20 April 2020.
  1. Go to Banking, select New, then New Sale or Receipt.
  2. Select Other Receipt.

    Date Received* Date you received the money.
    Bank Account* The bank account the money was paid into
    Amount Received* Total amount you received, e.g 25,000.
    Reference If required, enter a reference.
    Details Enter any additional details as required.

    *Field compulsory.

  3. Enter the information required to record the money received, for example:

    Ledger Account Details VAT rate Total
    4970 - Retail, leisure and hospitality grant Retail, leisure and hospitality grant received No VAT 25000.00
  4. Click Save.

You’ve now recorded receipt of the loan. This updates your ledger accounts with the following posting.

Ledger Account Debit Credit
1200 - Bank account 25000  
4970 -Retail, leisure and hospitality grant   25000

For VAT registered businesses, income is vatable if it's within the normal scope of a business or linked to a supply. Coronavirus related grants are one-off events unrelated to any supply of goods or services. Whilst it's unlikely that any grant income will attract a VAT liability, you should seek specific advice from your accountant to understand if any grant received should be treated as vatable or non-vatable income. You can find further details on what income is vatable in the HMRC manual. Grant income is likely to be considered income for income or corporation tax purposes.


What support can I get for my business?

These measures are part of a wider government package that's being offered due to coronavirus. To find out what other funding you might be eligible for, visit these pages.