Local authorities have full discretion to request and examine trading business accounts, booking lists and self-assessment tax returns submitted to HMRC for the financial year ending 31 March 2019 if additional evidence is required to demonstrate that this criteria is met.  

My point would be why did the local council not do due diligence like this in the first place, then we would not be in the mess that we are in?

Grant 1
A grant of £25,000 is being made available for retail, leisure and hospitality businesses occupying properties with a rateable value of between £12,001 and £51,000.
It is estimated that there are up to 8,500 eligible properties in Wales, entailing a fund of around £214m.

Grant 2
A £10,000 grant to all businesses eligible for small business rates relief (SBRR) in Wales with a rateable value of £12,000 or less. It is estimated that there are up to 63,500 eligible properties in Wales, entailing a fund of around £635m.
The multiple property restriction applied to the Small Business Rates Relief scheme applies to this grant. Therefore the same ratepayer may only receive the grant for a maximum of two properties in each local authority.