Subsidy control: guidance

Guidance to help public sector bodies to understand and comply with subsidy control.


Subsidy tests

In order to determine that a measure is subject to Subsidy Control rules, two initial assumptions must apply:

1. The beneficiary is an ‘economic actor’.

Taken from Article 363 of the Subsidy Control chapter of the TCA, the term 'economic actor' means 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. 

2. The recipients are engaged in ‘economic activity’.

Economic activity essentially means offering goods and/or services on a given market and which could, at least in principle, be carried out by a private operator for remuneration in order to make profits. Usually, the question of whether or not an intended recipient engages in economic activity is straightforward, but not always. 

If you are in any doubt, funding bodies should seek advice from the Subsidy Control Team before concluding that your proposed measure is not a subsidy.

If the above two assumptions are met, then all four of the following tests must be met for a subsidy to be present.

Test 1

Will the measure arise from State resources (which can take a variety of forms (e.g. grants, interest and tax reliefs, loans, guarantees, government holdings of all or part of a company, or providing goods and services on preferential terms etc.)?

Test 2

Will the measure confer an economic advantage on one or more economic actors?

Test 3

Is the measure specific insofar as it benefits, as a matter of law or fact, certain economic actors over others in relation to the production of certain goods or services?

Test 4

Will the intervention have, or could it have, an effect on trade or investment between the UK and the EU?

If you determine that a subsidy is present, the following sections may help guide you through the process to ensure compliance with Subsidy Control rules. Please note that individual awards of less than 325,000 Special Drawing Rights (approx. £335,000) may be able to be awarded as small amounts of support, which replaces the EU de minimis provision (see below).

A ‘principles assessment’ must be completed for any new schemes or ad-hoc awards. Please see the next section for more detail.

Contact

subsidycontrol@gov.scot

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