Subsidy control
Subsidy control is the legal framework that governs public money given to businesses. It replaced the EU state aid regime for Great Britain and is set out in the Subsidy Control Act 2022.
Most grant applicants only need to know whether an award is treated as small assistance or as something larger. That decision determines the route the funder uses and what you must declare.
Small subsidies can be awarded without the full subsidy control assessment. In the UK this is called Minimal Financial Assistance and is capped at £315,000 over three financial years. Under EU rules the equivalent de minimis ceiling is €200,000 over three fiscal years. The two cumulate, so EU de minimis aid you have already received counts toward the UK MFA total.
If a grant is too large for MFA, the funder redirects it into a streamlined route if one is available, or carries out a full assessment against the subsidy control principles. As the applicant, you do not choose the route; you simply declare other public support and keep records of what you have received.
Most UK grant funding is a subsidy. The funder must check that the award complies with subsidy control rules, and the grant will usually count toward your Minimal Financial Assistance total.
The GOV.UK quick guide explains how public authorities assess this.
HMRC R&D tax relief is a tax expenditure, not a subsidy. It does not count toward subsidy control ceilings and it does not clash with grant funding for most UK companies.
Under the merged R&D scheme, holding an innovation grant no longer restricts your R&D tax credit claim. The same qualifying project can attract both forms of support.
Grant awards usually count toward the Minimal Financial Assistance threshold of £315,000 over three financial years. Funders will ask what other public support you have received.
Companies registered in Northern Ireland claiming Enhanced R&D Intensive Support must check a de minimis state aid limit. This is separate from the merged scheme rules.
You may need to prove the total subsidies your enterprise group has received in the current and previous two financial years. Good records avoid delays at offer stage.
State aid is public support that gives an advantage to one or more enterprises and could distort competition. Since leaving the EU, most UK subsidies are governed by the Subsidy Control Act 2022. Northern Ireland has specific EU state aid carve-outs under the Windsor Framework.
Yes. Innovation grants, feasibility awards, collaborative R&D funding and most regional or sector grants are subsidies. Small awards may be treated as de minimis or Minimal Financial Assistance, while larger awards are redirected into a streamlined route or a full principles assessment.
No. The merged R&D expenditure credit and Enhanced R&D Intensive Support are not notified state aid. They do not count toward the Minimal Financial Assistance ceiling, and receiving a grant no longer restricts an R&D tax credit claim. The exception is Northern Ireland registered companies claiming ERIS, where a de minimis state aid limit applies.
No. Under the merged scheme, grant funding is irrelevant to the R&D tax credit calculation. You claim on qualifying expenditure regardless of how the project was funded. The old requirement to split grant funded costs out of the claim has been abolished.
Minimal Financial Assistance lets public authorities award low-value subsidies without the full subsidy control assessment. No enterprise or group under common control can receive more than £315,000 of MFA over three financial years. This includes any equivalent EU de minimis aid received in the same period.
Small innovation vouchers, feasibility awards, local growth grants, export readiness support and modest university or catapult awards that keep the total under the MFA ceiling are usually treated as de minimis or MFA. The funder decides the classification and will send you an MFA notification if it applies.
The funder redirects the award into a streamlined route if one covers that type of support, or carries out a full assessment against the subsidy control principles. This does not change your eligibility, but the funder will need more information about other public support you have received.
Funders typically ask for details of other public subsidies your company or group has received in the current and previous two financial years. This helps them check whether the new award stays within subsidy control limits and whether a streamlined route or full assessment applies.
For the R&D specific view, see our R&D tax credits FAQs.
Book a free consultation and we will help you combine grants and R&D tax relief while staying on the right side of subsidy control.
