Following the end of the transition period, EU State aid rules no longer apply to subsidies granted in the UK.
On Thursday 4 March 2021, new subsidy allowances were established for the COVID-19 business grants schemes, on the basis of the principles set out in Article 3.4 of the TCA. These allowances include any grants previously received under the COVID-19 business grant schemes and any State aid previously received under Section 3.1 of the European Commission's Temporary Framework across any other UK scheme.
An economic actor (defined for this purpose as an entity or a group of entities constituting a single economic entity regardless of its legal status, that is engaged in an economic activity by offering goods or services on a market.) may receive grant funding up to one of the following three subsidy allowances for this scheme set out below:
1. Small Amounts of Financial Assistance Allowance - as at 2 March 2021, an economic actor may be allowed up to £335,000 (subject to exchange rates) over any period of 3 years under Special Drawing Rights.
2. COVID-19 Business Grant Allowance - businesses are allowed up to £1,900,000. This may be combined with the Small Amounts of Financial Assistance Allowance to equal £2,235,000 (subject to the exact amount applicable under the Small Amounts of Financial Assistance Allowance using the Special Drawing Right calculator).
3. COVID-19 Business Grant Special Allowance - if you have reached your limits under the Small Amounts of Financial Assistance Allowance and COVID-19 Business Grant Allowance, you may be able to access a further allowance of funding under these scheme rules of up to £10,000,000 (£12,235,000 if combined), provided the below conditions are met:
- Special Allowance covers only the applicant's uncovered fixed costs incurred during the period between 1 March 2020 and 31 March 2022. Uncovered fixed costs' means fixed costs not otherwise covered by profit, insurance or other subsidies;
- The grant payment must not exceed 70% of the applicant's uncovered fixed costs, except for micro and small enterprises (for the purposes of this scheme defined as less than 50 employees and less than £9,000,000 of annual turnover and/or annual balance sheet), where the grant payment must not exceed 90% of the uncovered fixed costs
- An applicant must be able to provide the necessary documentation to demonstrate it is eligible for funding under this COVID-19 Business Grant Special Allowance.
