UK Subsidy Controls and SAFA Rules

Information about the new UK Subsidy Controls, which have replaced EU State Aid in the UK following Brexit

The new UK Subsidy Controls have replaced EU State Aid in the UK, following Brexit. The Controls outline how the government can provide financial support to UK businesses, and sets limits on this.

SESF grants are paid under the UK Subsidy Controls, using the new SAFA (Small Amounts of Financial Assistance) rules as set out at Article 3.2.4 of the EU/UK Trade & Cooperation Agreement. This currently allows organisations to receive up to £325,000 of government subsidy in any three financial years, but we are asking organisations to tell us about anything over £315k, as the rules are likely to change in the next few months.

What counts towards the SAFA limit?

Your social enterprise may have received support from public authorities (the government, local authorities, health authorities, some Lottery funds, HMRC etc) in the last three financial years. This support may have been in the form of grants, loans, tax incentives or business advice.

Not all of this support will “count” towards the SAFA limit.

Counts towards SAFA limit:

  • Employment Allowance (HMRC support for National Insurance payments, which is currently up to £4000 a year)
  • Some COVID grants or loans
  • It should state if these are paid under SAFA or State Aid de minimis rules on the paperwork
  • Any other grants or support you have received under State Aid De Minimis or SAFA Rules in last three financial years.

Does not count towards SAFA limit:

  • Job Retention Scheme (Furlough) grants
  • Grants or loans paid under EU Temporary Framework (some business grants, some SESF grants)
  • Grants from non public authorities – such as Trusts and Foundations
  • Most Lottery Grants (but check the Grant Offer)
  • Other: Trading income, including contracts from public bodies, donations from individuals or corporates

Normally, if the grant or support you received was provided as State Aid de minimis funding or under SAFA rules, you should have a letter or agreement which states this.

How much is allowed under SAFA Rules?

Your social enterprise is allowed to receive £325k (soon to be £315k) of government subsidy under SAFA or State Aid de minimis rules in any three financial years. You should therefore consider any government subsidy in this financial year and your last two financial years.

What am I agreeing to, when I sign my Grant Offer?

When you sign your SESF Grant Offer, you are confirming that, including the SESF Grant, you will not have received more than £315k in government subsidies under SAFA or de minimis State Aid in the last three years (this financial year and the last two financial years).

You are also agreeing to the Grant Conditions, which require you to pay the grant back with interest, if it is later found that you have breached these rules.

When should I talk to my Grant Manager about this?

It is very unlikely that you will have received more then £315k under SAFA or State Aid de minimis rules over the last three financial years. But if you have any doubt about this, then please talk to your SESF Grant Manager, before you sign the Grant Offer, and seek your own legal advice if necessary.

For further information:

Here are full details of the UK Subsidy Rules.