Subsidy control: guidance

Subsidy tests

In order to determine that a measure is subject to Subsidy Control rules, all four of the following limbs must be met for a subsidy to be present:

Limb A

Will the measure be given, directly or indirectly, from public resources by a public authority? Public authorities include any entity which exercises functions of a public nature. Public resources include public funds that are administered by the UK Government, devolved governments or local authorities, whether they are given directly, though other public bodies (e.g. agencies), or through private bodies. This can take a variety of forms, e.g. grants, interest and tax reliefs, loans, guarantees, government holdings of all or part of a company, or providing goods and services on preferential terms, etc.)

Limb B

Will the measure confer an economic advantage on one or more enterprises? You must first determine if the recipient of the measure is an enterprise: any entity (person, or groups of persons under common control) that is engaged in economic activity. Economic activity essentially means offering goods and/or services on a given market and which could, at least in principle, be carried out by a private operator for remuneration in order to make profits. Usually, the question of whether or not an intended recipient engages in economic activity is straightforward – but not always. 

If you are in any doubt, funding bodies should seek advice from the Subsidy Control Team before concluding that your proposed measure is not a subsidy.

Limb C

Is the measure specific insofar as it benefits, as a matter of law or fact, certain economic actors over others in relation to the production of goods or the provision of services (this covers any measure that is provided directly or indirectly to specific beneficiaries determined on a discretionary basis by the public authority, as well as assistance that benefits (directly or indirectly) only enterprises in a particular sector, industry, or area, or with certain characteristics)?

Limb D

Will the intervention have, or is it capable of having, an effect on competition or investment within the UK, or an effect on trade or investment between the UK and another country or territory, or both?

Further detail on each of the four limbs is set out in Annex 1 of the Subsidy Control Statutory Guidance.

If you determine that a subsidy is present, the following sections may help guide you through the process to ensure compliance with Subsidy Control rules. Please note that individual awards of less than £315,000, may be able to be awarded using Minimal Financial Assistance (MFA) , which replaces the EU de minimis provision (see below).

A ‘principles assessment’ must be completed for any new subsidy schemes or standalone awards. Please see the next section for more detail.