Notice

Annex 2 - Subsidy control and state aid

Updated 26 October 2023

1. Subsidy Control (and State aid where relevant) 

The UK Space Agency supports UK based businesses to invest in research, development, and innovation. The support we provide is consistent with the UK’s international obligations and commitments to Subsidy Control. These include: 

• WTO rules
• the EU-UK Trade and Cooperation Agreement (TCA), (see EU-UK TCA summary and BEIS (Departnment for Business, Energy & Industrial Strategy) guidance)
• in certain circumstances (eg, under the Northern Ireland Protocol) EU State aid regulations may also be applied
• other bilateral UK FTAs (Free Trade Agreements) where relevant
• Subsidy Control Act 2022

2. What is a subsidy? 

For the purposes of UK international commitments, a subsidy is a measure which: 

1. Is given by a public authority. This can be at any level: central, devolved, regional or local government or a public body.
2. Makes a contribution (this could be a financial or an in-kind contribution) to an enterprise, conferring an economic advantage that is not available on market terms. Examples of a contribution are grants, loans at below market rate, or a loan guarantee at below market rate or allowing a company to use publicly owned office space rent free. An enterprise is anyone who puts goods or services on a market. An enterprise could be a government department or a charity if they are acting commercially.
3. Affects international trade. This can be trade with any World Trade Organisation member or, more specifically, between the UK and a country with whom it has a Free Trade Agreement. For example, if the subsidy is going towards a good which is traded between the UK and the EU this could affect trade between the EU and the UK. It is not necessary to consider whether the subsidy could harm trade, just whether there could be some sort of effect. Subsidies to very local companies or a small tourist attraction are unlikely to be a problem as this is unlikely to affect international trade.

The Subsidy Control regime (or where relevant EU State aid regulations) is designed to prevent unfair advantages and distortion of trade. Read more about complying with the UK’s international obligations on subsidy control.

More information on the principles of awarding subsidies can be found in the DSIT guidance.

The following table summarises the maximum intervention thresholds allowable level of support under UK Space Agency grant calls. The subsidy categories provided match the definitions used by the European Commission state aid regime paragraphs 83 to 98.

Subsidy category	Level of support available: Micro/SE	Level of support available: ME	Level of support available: LE
Fundamental research	100%	100%	100%
Feasibility study	70%	60%	50%
Industrial research	70%	60%	50%
Industrial research projects involving collaboration/ dissemination*	80%	75%	65%
Experimental development	45%	35%	25%
Experimental development projects involving collaboration/dissemination*	60%	50%	40%

*Collaborations between businesses and research organisations where the research organisation bears at least 10% of the costs and have the right to publish their own research. Procurement/supplier relationships do not qualify. 

The following table summarises the UK definition of what constitutes an SME:  

Company category	Staff headcount	Turnover	Balance sheet total
Medium sized	< 250	≤ £36m	≤ £18m
Small	< 50	≤ £10.2m	≤ £5.1m
Micro	< 10	≤ £632,000	≤ £316,000

To qualify for any category, the company must meet at least two of the above conditions (staff headcount, turnover or balance sheet total) within both the current financial year and the year previous.  

Anything above the limits for a medium sized company is designated as a large company. For more information on company sizes, please refer to the company accounts guidance. This is a change from the EU definition unless you are applying under state aid. 

Other sources of public funding are not eligible as a Private Venture (PV)/match funding contribution. 

Academic partners will be funded in all cases at 80% of Full Economic Cost (FEC). 

3. Previous project subsidies

In accordance with para 10.36 of the subsidy control statutory guidance, cumulation rules apply for any award issued under this call. This limits the Agency’s ability to fund projects that have received previous project funding that exceeds the limits of the scheme. To accurately assess compliance with the financial thresholds laid down in the streamlined schemes, all applicants are to identify any previous project funding from any public body over the last 3 years. Any applicant that has received over £10 million in total (including that been sought under this call) that would deem the award a Subsidy of Particular Interest, in accordance with the statutory guidance, will be ineligible for this call.

Date of Award	Awarding body	Total value of awarded funds
	Total:

Please provide a nil response if required.

4. Minimum Financial Assistance

The Subsidy Control Act 2022 has provision relating to Minimal Financial Assistance (MFA)  

For organisations applying under MFA, the total subsidy which can be given to each organisation is up to a maximum of £315,000 over a rolling 3 fiscal year period. This threshold is subject to change and grant recipients should consult the subsidy control guidance for regular updates.   

When calculating eligibility for the application of the MFA provision bidders must include cumulation of EU State aid de minimis grants under the EC’s de minimis regulation and Small Amounts of Financial Assistance (SAFA) under the EU Trade and Co-operation Agreement (TCA) for the same 3 fiscal year period. The maximum total under the EC regulation is €200,000, the maximum total under SAFA is £340,000 or 325,000 Special Drawing Rights. This is for all project types and for most purposes, including operating aid. You must complete and provide the UK Space Agency with a declaration as part of your response.  

The declaration asks you to tell us about any awards, including those made under de minimis and SDR, (from any source of public funding) over a rolling 3 fiscal year period.  

If you have received an award under de minimis or SDR for the same period, this will be added to your total allowance under MFA. This means that the total award must not exceed £315,000) for any one organisation. You must declare this allowance to any other funding body who requests it.  

5. Disclaimer 

This guidance is not a substitute for taking independent legal advice on your eligibility status, before applying for funding. Every applicant is responsible for securing their own independent legal advice to ensure they are lawfully eligible.  

Please note the UK Space Agency is unable to award organisations that are considered to be ailing and insolvent companies. We will conduct financial viability and eligibility tests to confirm this is not the case following the application stage. 

If you see an error in this guidance, please contact us.