United Kingdom

Introduction

While the UK is no longer a Member State of the European Union, EU State aid rules continue to apply in the UK during the transition period. The UK Government has announced an unprecedented set of measures to support the economy in response to the COVID-19 crisis. To the extent the UK’s Government’s measures are not UK-wide, the devolved administrations in Wales, Scotland and Northern Ireland have all announced similar packages of measures. 

EU State aid law context

National State aid schemes (programs) introduced by EU Member States and individual aid granted by national instances must comply with the applicable EU State aid law. Member States may e.g. notify new programs based on the EU Commission’s Temporary Framework, introduce new programmes or grant aid in individual cases based on the provisions of the Treaty (Art. 107 para 2 TFEU) on aid to recover the damage caused by exceptional occurrences or grant aid to firms in difficulty under the Guidelines for Rescue and Restructuring aid. Please refer to the EU chapter for more details.

National Public Support

UK-wide National COVID-19 Temporary Framework

Who is eligible for the aid?

UK-based small and medium sized enterprises (SMEs) and large corporates active in all market sectors.

What does the aid consist of?

The Framework is an umbrella scheme for UK State aid, with an estimated budget of £50 billion, allowing for the provision of:

  • Direct grants, equity injections, selective tax advantages and advance payments;
  • State guarantees for loans subject to safeguards for banks to channel State aid to the real economy; 
  • Subsidised public loans to companies with favourable interest rates; 
  • Support for COVID-19 related R&D; 
  • Support for the construction and upscaling of testing facilities to develop and test products useful to tackle the COVID-19 outbreak; and 
  • Support for the production of products relevant to tackle the COVID-19 outbreak.

Where to apply for the aid?

Aid is granted under the scheme either directly or, if it concerns guarantees on loans, through credit institutions and other financial institutions as financial intermediaries.

Is a notification to the EU Commission necessary?

The scheme was cleared by the Commission on 6 April 2020 under the amended Temporary Framework. Individual aid granted pursuant to the scheme does not need to be notified. Further information is available here.

Further remarks

No


Retail, Hospitality and Leisure Grant Scheme  

Who is eligible for the aid?

Businesses in the retail, hospitality or leisure sector which are based in England and have a rateable value of under £51,000.

What does the aid consist of?

The scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property:

  • Businesses in these sectors with a property that has a rateable value of up to £15,000 may be eligible for a grant of £10,000.
  • Businesses in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 may be eligible for a grant of £25,000.

Where to apply for the aid?

Eligible businesses do not need to do anything. Their local authority will write to them if they are eligible for this grant.

Is a notification to the EU Commission necessary?

The Retail, Hospitality and Leisure Grant Scheme can be paid under the UK-wide National COVID-19 Temporary Framework which was cleared by the Commission on 6 April 2020 (see above).Individual aid granted pursuant to the scheme does not need to be notified.

Further remarks

No


Small Business Grant Scheme  

Who is eligible for the aid?

Businesses based in England, businesses that occupy property, and businesses receiving small business rate relief or rural rate relief as of 11 March 2020.

What does the aid consist of?

The scheme will provide grant funding for local authorities to support small businesses that already pay little or no business rates because of small business rate relief, rural rate relief and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

Where to apply for the aid?

Eligible businesses do not need to do anything. Their local authority will write to them if they are eligible for this grant.

Is a notification to the EU Commission necessary?

Small Business Grant funding can be paid as De Minimis aid (€200,000 limit over 3 years), in which case no notification is necessary. However, where the De Minimis threshold is exceeded, it should be notified under the Temporary Framework.

Further remarks

No


Coronavirus Business Interruption Loan Scheme (CBILS) 

Who is eligible for the aid?

UK-based SMEs active in all market sectors (i) with turnover of no more than £45 million per year; and (ii) that meet the other British Business Bank eligibility criteria.

What does the aid consist of?

Two separate schemes are covered by the CBILS:

  • The UK Government will provide lenders with a government-backed guarantee of 80% for loan repayments on each loan to SMEs with turnover of up to £45 million per year to cover their working and investment capital needs. The scheme will be implemented through the British Business Bank, a national promotional bank but the loan is provided directly by the participating bank. The maximum value of the facility provided under the CBILS is £5 million, available on repayment terms of up to six years. The scheme provides the lender with a government-backed, partial guarantee against the outstanding balance of the finance. The borrower remains 100% liable for the debt. The UK Government will make a Business Interruption Loan Payment to cover the first 12 months of interest payments and any lender-levied charges.
  • The UK Government will provide direct grants to support SMEs affected by COVID-19. The overall budget for this scheme is £600 million and the support per company will not exceed €800,000 (£734,000) per company. 

Where to apply for the aid?

The British Business Bank operates the CBILS via its accredited lenders. There are over 40 of these lenders currently working to provide finance to SMEs. Eligible businesses should apply directly via the participating lender’s website.  

Is a notification to the EU Commission necessary?

The two separate schemes covered by the CBILS were approved by the Commission under the Temporary Framework on 25 March 2020. Individual aid granted pursuant to the CBILS schemes does not need to be notified.  

Further remarks

Further details about the scheme are available here.


COVID-19 Corporate Financing Facility (CCFF) 

Who is eligible for the aid?

All non-financial companies and their finance subsidiaries that make a material contribution to the UK economy. In practice, firms that meet this requirement would normally be: 

  • UK incorporated companies, including those with foreign-incorporated parents and with a genuine business in the UK; 
  • Companies with significant employment in the UK;
  • Firms with their headquarters in the UK;
  • Firms which generate significant revenues in the UK, serve a large number of customers in the UK or have a number of operating sites in the UK may also be eligible.

The facility is open to firms that can demonstrate they were in sound financial health prior to the shock (i.e. companies that had a short or long-term rating of investment grade or equivalent as at 1 March 2020).  

What does the aid consist of?

The CCFF will be operated by the Bank of England to purchase short term debt issued by firms making a material contribution to the UK economy, which is designed to support these firms in paying salaries, rents and suppliers.

The scheme will operate for 12 months and for as long as steps are needed to relieve cash flow pressures on eligible firms.

Where to apply for the aid?

In order to make use of the facility, corporates should contact their bank. If their bank does not issue commercial paper, UK Finance has provided a list of banks that are able to assist on its website.

Is a notification to the EU Commission necessary?

The CCFF was notified to the Commission. The clearance decision is awaited.

Further remarks

Further detail on eligibility criteria can be found here


Statutory Sick Pay relief package for SMEs  

Who is eligible for the aid?

UK-based businesses with fewer than 250 employees as of 28 February 2020.

What does the aid consist of?

The scheme will allow employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. The refund will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19.

Where to apply for the aid?

A rebate scheme is being developed. Further details to be provided in due course once the legalisation has passed.

Is a notification to the EU Commission necessary?

It is currently unclear if a notification is necessary. This will become clear once further details about the scheme become available. 

Further remarks

No


Business rates holiday for 12 months for retail, hospitality and leisure businesses that pay business rates 

Who is eligible for the aid?

Businesses based in England in the retail, hospitality and/or leisure sectors. Properties can benefit from the relief if they are occupied properties that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues; 
  • for assembly and leisure;
  • for hospitality, as hotels, guest & boarding premises or self-catering accommodation.

What does the aid consist of?

A business rates holiday for 12 months for retail, hospitality and leisure businesses in England for the 2020 and 2021 tax year.

Where to apply for the aid?

There is no action for eligible businesses. However, local authorities may have to reissue their bills to provide this support.  

Is a notification to the EU Commission necessary?

It is currently unclear if a notification is necessary. This will become clear once further details about the position the UK is taking in relation to this scheme become available. 

Further remarks

More information on eligibility is set out in the expanded retail discount guidance.


Business rates holiday for 12 months for nursery businesses that pay business rates  

Who is eligible for the aid?

Nursery businesses based in England and properties that are occupied by providers on Ofsted’s Early Years Register which are wholly or mainly used for the provision of Early Years Foundation Stage.

What does the aid consist of?

A business rates holiday for 12 months for nurseries in England for the 2020 to 2021 tax year.

Where to apply for the aid?

There is no action for eligible businesses. However, local authorities may have to reissue their bills to provide this support.

Is a notification to the EU Commission necessary?

It is currently unclear if a notification is necessary. This will become clear once further details about the position the UK is taking in relation to this scheme become available. 

Further remarks

More information is available in the nursery discount guidance.

Authors

Madeeha Anthony
Madeeha Anthony
Picture of Caroline Hobson
Caroline Hobson
Co-head of Competition
Picture of Graeme Young
Graeme Young
Brian Sher
Brian Sher
Co-head of Competition
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