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Project Expenditure Eligible Costs

Expenditure falls under the following headings and applicants should consider the criteria in determining if the costs they plan to apply for are eligible for financial assistance under Rural Priorities:

The list of activities is not exhaustive. Applications for other types of expenditure may be considered, provided the criteria of the Rural Priorities are met.

Rural Priorities only provides funding for new and additional activities.

Rural Priorities will consider activity which is a result of a condition of planning consent or building warrant as eligible for support, subject to the other guidance available.

Under Rural Priorities, where capital investments are being undertaken in tangible assets they must be reasonably durable, not temporary or makeshift, and maintained for the full monitoring period of 5 years after completion.

For Actual Cost items and services the guidance on Quotes and Estimates should be followed.

Eligible categories of expenditure include:

 

Land and real estate expenditure

Land and real estate purchase costs will be included in eligible costs provided that all of the following conditions are met:

  • there is a direct and necessary link between the land or real estate purchase and the project objectives and no suitable building or other suitable land is already owned;
  • the applicant has an agreement to buy the land or real estate and an agreed purchase price ( Land Ownership Control and Withdrawal);
  • a certificate is obtained from an independent, qualified valuer confirming that the purchase price does not exceed the market value;
  • no European Community or national funding was provided within the last 10 years in order to purchase the land or purchase or develop the real estate;
  • the cost does not exceed 10% of total, other eligible expenditure on the project. Costs may exceed this, but the excess will not be considered eligible for funding.

Table 1. Example of limit on land or real estate purchase to a project

 

£

£

Total costs of project

50,000

 

Value of land/ real estate being purchased

10,000

 

Other eligible costs (total costs - land /real estate value)

40,000

 

Eligible land / real estate value = (10% of 40,000)

4,000

 

Total eligible costs (other eligible costs + eligible land purchase costs)

44,000

 

Total ineligible costs

 

6,000



Land preparation and capital works

The following may be eligible for assistance:

  • Land preparation and capital works towards development of new and innovative uses of land
  • Provision, alteration, enlargement or reconditioning of permanent buildings, including adaptation or improvement of redundant buildings and related structures, for other economic activity, but not for sale
  • Fees for planning permission and building warrants
  • Provision or improvement of facilities for the supply of electricity, gas, heating oil or water for the enterprise
  • Provision or improvement of drainage or the treatment of waste generated by the enterprise
  • Provision or improvement of access roads, paths, fences, car parks, bridges, jetties and landscaping required in connection with the enterprise. The cost of altering/upgrading a public road is not eligible for funding. Government funding for roads is channelled via the local government grant.

The cost of routine maintenance works or the repair of normal wear and tear on items is not eligible for assistance.

For properties for accommodation - for example long-term lease, bed and breakfast or self catering:

  • Decoration - painting or wall papering are not eligible costs. Wall tiles for kitchens and bathrooms are eligible costs.
  • Floor tiles are an eligible cost, but laminate flooring is not.
  • Soft furnishings, such as carpets, rugs and curtains are ineligible.

For construction projects, we would expect business and financial plans to:

  • include a row allowing for the cost of contingencies. However, contingency costs are not considered eligible project costs for Rural Priorities and will not be considered for funding.
  • take account of the Rural Priorities claims processes. Rural Priorities only pays for items in the calendar year in which they are completed, e.g. when the expected retention is paid. In particular guidance on Claims for Standard Cost Capital & Actual Cost Capital Payments and Interim Claims for Actual Cost items. Rural Priorities claims system is different from those of other grant schemes.

Professional Fees and staff costs

The following are eligible for assistance:

  • Applicant's contribution of staff time or services which are necessary for the project to go ahead and would otherwise have to be purchased. (See Labour Rates, Schedules and Timesheets below.) This should not be considered as an in-kind contribution.
  • professional fees incurred for costs relating to planning, building, engineering, monitoring, project management and other works and statutory consents (architects, surveyors and engineers) are eligible items within the costs of the project, both before and after the physical works start. Fees may only be included where it can be demonstrated that they have been incurred as a result of a competitive tendering process ( Quotes and Estimates). This refers to the use of both external consultants and in-house professionals. Applicants may not offset existing staff costs related to a project. These fees are restricted to 12% or less of the overall project costs.

Please note that we will consider necessary costs relating to professional fees for development;

  • from the date that we receive your Statement of Intent or
  • up to a year before the date that we receive your submitted Proposal

In either case, costs for work earlier than 20 February 2008 will not be considered.

  • Salaries and wages are ineligible costs. Staff time would be accounted for under the first bullet point above.
  • Costs associated with payment of consultants that provide support in completion of application / claim forms and with management fees are not eligible.

Machinery

Machinery must be entirely related to new and additional activity and only useable for that purpose. The replacement of existing machinery is not an eligible activity, e.g. an old tractor may not be replaced with a new tractor to continue to do the same work.

Any capital item purchased through hire or lease purchase within the five year period of the contract, must be in full ownership of the applicant before making the final claim for grant and proof of ownership must be provided.

The following may be eligible for assistance:

  • Provision and installation of fixed equipment and machinery
  • Provision of mobile equipment/machinery, where it is considered an integral part of the proposed enterprise. The cost of commercial/industrial equipment such as freezing and cold storage facilities, bakery equipment or commercial cookers may be eligible but domestic cookers, cooker hoods and other white goods will not be accepted .
  • Provision of IT equipment, where it is considered an integral part of the proposed enterprise

Second hand equipment and materials can be considered for this support if the following criteria are met:

  • They have not been subject to European Community or national funding in the past
  • They are fit for purpose. In the case of second hand steel for a shed it may be necessary to obtain an engineer's certificate to verify its technical specification. A local authority completion certificate may not be granted on such a structure unless such a certificate is supplied. Case Officers must advise applicants to get this in advance as claims will not be accepted without them
  • The applicant supplies a declaration verifying both points above

Grant for the purchase of second hand equipment should be accepted in favour of small and medium sized enterprises ( SMEs) where the lower cost of such equipment may be a useful first step towards modernisation, notably for companies that start from a very low technical standard and which have little capital. Large companies should only receive aid for the purchase of new equipment.

Marketing and Promotional expenditure

Marketing assistance is not available in isolation, but should form an integral part of the strategy for the development and viability of a new or expanding enterprise which is to be assisted under Rural Priorities. You may be eligible to apply for marketing and promotional costs under certain Axis 3 Options; however these general terms should be read in conjunction with individual Option guidance. Eligible expenditure might include:

  • Promotional Material - Printed or photographic promotional aids, including sales brochures, leaflets, labelling, packaging, design, point-of-sale material and promotional video.
  • Advertising - Where advertising is identified within a promotional strategy, then costs specifically relating to the proposed project may be considered.
  • Trade Shows - attendance as an exhibitor at a relevant and approved trade or consumer event. Eligible costs may include stand space and structure, temporary carpeting, furniture hire, electrics, graphics, refrigeration hire, freight/carriage and interpreter costs for overseas events only.
  • Educational and Sales Visits - Educational work and sales visits aimed at increasing businesses' awareness of current trends and developments. Eligible costs may include travel and subsistence, course fees and event entry charges.

Other eligible expenditure

  • Provision of nursery stock for propagation and initial provision of livestock for breeding for non-agricultural/food production purposes, including provision of animals for use in interpretative centres, wildlife parks or other similar facilities.
  • Provision of boats or rafts for use other than commercial fishing.
  • Provision of horses or ponies for pony-trekking or other activities or fish for managed waters (amenity fishing only)

Small and Medium-sized Enterprises (SMEs)

An enterprise is considered to be any entity engaged in an economic activity, irrespective of its legal form. This includes, in particular, self-employed persons and family businesses engaged in craft or other activities, and partnerships or associations regularly engaged in an economic activity.

The European Commission defines micro, small and medium-sized enterprises by staff headcount and financial ceilings. SMEs employ fewer than 250 persons and have an annual turnover not exceeding €50 million, and/or an annual balance sheet total not exceeding €43 million. Within the SME category:

  • a small enterprise is defined as an enterprise which employs fewer than 50 persons and whose annual turnover and/or annual balance sheet total does not exceed €10 million.
  • a microenterprise is defined as an enterprise which employs fewer than 10 persons and whose annual turnover and/or annual balance sheet total does not exceed €2 million.

Forms and Further Information

Labour rates, Schedules and Timesheets can be found here.