Publication - Advice and guidance

Coronavirus (COVID-19): funding for businesses affected by Omicron control measures

Funding for businesses affected by measures to control the spread of the Omicron variant of coronavirus - including the hospitality sector and taxi drivers.

Coronavirus (COVID-19): funding for businesses affected by Omicron control measures
Hospitality (including pubs and nightclubs)

Nightclub Closure Fund

In line with the commitment to sustainable and inclusive growth and the Coronavirus (COVID-19): Fair Work Statement, we have allocated funding to support nightclubs required to close under the restrictions in force from 27  December 2021. 

The Nightclub Closure Fund will provide financial support to eligible nightclubs etc. required to close to members of the public under regulation 4C of the Health Protection (Coronavirus) (Requirements) (Scotland) Regulations 2021.

This page sets out the eligibility criteria, amounts which can be claimed and the application process.  It has no statutory basis, is offered without prejudice to relevant legislation and legal decisions and does not constitute legal advice.

The Nightclub Closure Fund is a Scottish Government fund administered by local authorities.

Who is eligible

The Nightclub Closure Fund will provide support to nightclubs etc. required to close to members of the public under regulation 4C of the Health Protection (Coronavirus) (Requirements) (Scotland) Regulations 2021 .

For the purposes of this grant, a nightclub is defined as:

  • an entertainment premises that is open until at least 2am at the weekend (pre-covid operating hours), and the main or routine operation of the premises is after 7pm, and where the majority of the premises are given over to permanent dance floor facilities. It also:
  • has a permanent DJ performance area/booth
  • is licensed for recorded music, dance facilities and live performance (at Q5 Activities Matrix within the Premises Licence Operating Plan); and
  • the premises Licence Operating Plan at 5(g) confirms it trades Post 01.00am with music exceeding 85 DB and more patrons likely to be standing than seated
  • Is not open during the day as a bar, pub or restaurant – establishments that are open during the afternoon for example are not eligible

Businesses that are not nightclubs will not be eligible for this funding.  Awards are granted based on the primary function of the business.  It is for a local authority to determine if a business meets the description and further information can be requested, where necessary, to determine eligibility of applications.

The public sector or arm’s length external organisations (ALEOs) are not eligible.

During previous restrictions where businesses (including nightclubs) were required to close, the UK Government’s Coronavirus Job Retention Scheme was in operation and provided support to employers to meet salary costs.  The Job Retention Scheme closed on 30 September 2021.  While the Nightclub Closure Fund does not operate in the same way as the Job Retention Scheme, part of the purpose for providing the Nightclub Closure Fund is to enable nightclubs to pay and retain staff during this period of closure. 

All eligible businesses criteria

Businesses must declare the following as part of the application process and supply documentation where necessary.

The business must:

  • have a business bank account
  • have complied with wider COVID regulations/requirements prior to local restrictions
  • not have connections to tax havens, as set out in Part 12 of Schedule 4 to the Coronavirus (Scotland) (No.2) Act 2020

Applicants are required to declare all previous support received from UK or Scottish or Local Government support schemes to provide local authorities with the necessary information to ensure payments are made correctly and compliant with applicable subsidy control requirements.

Application process

Nightclubs previously required to close under the Business Contingency Funding will be contacted directly and invited to apply for this grant. 

The application form will ask businesses to:

  • provide relevant details about their business and premises, including that:

    • the business must have physical premises

    • the business should be the main occupier

    • the business owner should be responsible for paying non-domestic rates (NDR)

  • confirm that they were trading on 20 December 2021; and

  • confirm that they have closed as a result of the restrictions currently in place, and were closed before 23:59 on 31 December 2021.

The application form will seek additional information from businesses about their employees and usual wage costs.  While this information will not directly inform the level of grant awarded, it is important to provide an understanding of the extent to which this funding supports nightclubs to retain staff.

The local authority will require evidence of how the businesses meets the eligibility criteria.  Being registered for non-domestic rates will be the main way to do this and the application process will request the unique identifier number for this.  The grant is available for businesses with premises registered for NDR as of 22 December 2021.  Local authorities may also ask for details on the business owner/s and evidence of premises being used as a business in one of the eligible businesses such as licensing details.  In addition, other details will be required to allow payment to be made such as bank account details and proof of access to this. 

Local authorities have discretion to award grants to eligible businesses which lease or rent premises which are not rated, such as those leased from a council in a public park, provided they are satisfied with the validity and eligibility of individual cases.

The business must be actively trading, and be able to demonstrate they were on 22  December 2021.  Where necessary, local authorities can request additional evidence to determine this eligibility such as receipts, banking or other evidence. 

Provided they meet all the eligibility criteria, businesses which are Limited Companies (including social enterprises), Sole Traders, Trusts, Partnerships, Community Interest Companies or Scottish Charitable Incorporated Organisations, may apply for a grant.

Businesses set up since 3 November 2020 or where there has been a change of use

Businesses registered as a nightclub but have never received Covid-19 funding via the local authority, may be eligible for funding.  Additional details will be required in order to assess this and further details of this process will be updated and provided here soon. 

Level of grant award

The grant is a one-off payment at the rate of:

  • £25,000 for premises which have a rateable value of up to and including £40,000
  • £35,000 for premises which have a rateable value between £40,001 and £75,000
  • £55,000 for premises which have a rateable value of £75,001 or above

The rateable value of the property is considered to be as per local authority records at 1 November 2021.  Any changes to the valuation roll after 1 November 2021 including changes backdated to this date should be disregarded for the purposes of eligibility.  However, if a property was requested to be entered into the roll or the entry modified before 1 November but delayed for administrative or systemic reasons, local authorities have discretion to consider such business eligible.

Multiple properties

Individual ratepayers with more than one business, may receive an award for each registered business entity.

Next steps

If you are a nightclub (as defined in the eligibility criteria above) and previously received funding under the Strategic Framework Business Fund, you will be contacted directly.

Management of the funding

Any personal information about individuals gathered through the process will be held in confidence, in keeping with data protection policy and practice. Information provided in connection with an application will not be passed on without consent.

This grant funding will be made available through powers conferred under sections 126 & 127 of the Housing grants, Construction and Regeneration Act 1996.

Given responsibilities to managing public funds, the Scottish Government and local authorities are required to ensure that procedures for administering the grant are suitably robust, including due diligence to mitigate fraud and for audit purposes. As such, the full process for applying to the fund will be set out within this document soon.

Where evidence of fraud or misuse of the fund is identified, this will be recorded and may be taken into account in future applications. Where appropriate, the applicant will be made aware this is the case and be given the opportunity to explain.

Local authorities will seek recovery of overpayments, including pressing criminal charges where necessary, where claims are found to be fraudulent.

Non-domestic rate payers are eligible for a one-off grant regardless of any arrears. Local authorities have some discretion to withhold grant awards in very exceptional circumstances where the business has significant outstanding arrears, which have been subject to a court decision.

State Aid/subsidy control

Applicants are required to declare all previous support received from UK or Scottish or Local Government support schemes to provide local authorities with the necessary information to ensure payments are made correctly and

and compliant with limits as set out in the EC State Aid Covid-19 Temporary Framework which is being used to provide safe-harbour.

The EU State Aid rules no longer apply to subsidies granted in the UK following the end of the transition period, which ended on 31 December 2020. This does not impact the limited circumstances in which State Aid rules still apply under the Withdrawal Agreement, specifically Article 10 of the Northern Ireland Protocol.

You can access BEIS Guidance that provides more detail on this.

The Local Authority will need to ensure that any funding awarded after 31 December 2020 is compliant with the UK’s international commitments arising from membership of the World Trade Organisation or through the UK’s various Free Trade Agreements, including the UK-EU Trade and Cooperation Agreement. See further guidance on the application of Free Trade Agreements from the Department of Business, Enterprise, Innovation and Skills.

First published: 7 Jan 2022 Last updated: 21 Jan 2022 -