Types of state aid

Due to the pandemic unprecedented numbers of entities are receiving state aid. There are different rules for different types of state aid. These rules derive from the EU, and even though we are leaving the transitional period on 31/12/20 it is likely that the rules will persist in some form for the following four years.

Notified state aid

This is where the provider has to make a notification to the EU commission. You can only receive one form of notified state aid for any given project. Examples of notified state aid are:

  • R&D tax relief under the SME scheme
  • Some grant funding, such as Innovate UK
  • Coronavirus Business Interruption Loan Scheme and Bounce Back Loan Scheme

This means for example that you cannot claim R&D tax relief under the SME scheme for a project that is funded by Innovate UK. CBILS and BBL are, and should be regarded as, not project specific.

De minimis state aid

This is aid which is subject to an overall de minimis which is a rolling €200,000 over a three year period. Types of de minimis state aid include:

  • Seed Enterprise Investment Scheme
  • Social Enterprise Investment Scheme
  • Employment Allowance
  • Covid-19 support grants under the Small Business Grant Fund and the Retail, Hospitality and Leisure Grant Fund (the £10k or £50k that was received via local councils)

General Block Exemption Regulations

This is aid that does not need to be notified to the EU and does not fall within the de minimis rules.

The Enterprise Investment Scheme is covered by the block exemption. This means it does not affect eligibility for other forms of state aid.

Support which is not state aid

  • Coronavirus Job Retention Scheme and Job Support Scheme: these are not selective measures and so do not distort competition and are not regarded as state aid
  • Future Fund
  • Innovate UK’s continuity grants and loans fall under a temporary framework for state aid which applies until 31/12/20

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