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HMRC internal manual

Film Production Company Manual

Overview and general definitions: State aid

A State aid is defined in Article 107(1) Treaty on the Functioning of the European Union as:

‘any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.’

The Department for Business, Energy & Industrial Strategy (BEIS) provides further guidance on State aids.

State aid intensity and cumulation

Cumulation means that you must add up any State aid received from more than one source going to the same project.

Other forms of State aid may include: grants, direct payments, interest rate subsidies, tax reliefs, repayable advances, reimbursable grants, guarantees, tax advantage or exemption, risk finance, or any aid by a state or through its own resources. This list is not exhaustive and companies should determine whether any payments, grants etc. they receive are State aid which may need to be taken into account when determining whether they have reached an intensity level.