If an organisation receives grants from the government under the COVID-19 support it appears that the State Aid treatment varies. The latest guidance is that Small Business Grants are State Aid - usually considered to be paid under de minimis rules, but sometimes under the Temporary arrangments
Leisure Retail and Hospitality grants are paid under other rules (Temporary COVID rules) and dont count to de-minimis.
But I cant find any guidance on the treatment of payments under the Job Retention Scheme?
I am working on a grants programme that is considered to be State Aid, and usually paid under deminimis rules, but now not sure if organisations will be using up all their de min allowances if they are receiving support under COVID-19 rules..
Do we know yet?
thanks
Replies (13)
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At the moment you can only rely on a negative.
Recently looking at the Employment Allowance (because new PAYE year and some things still carrying on). This is specifically flagged as State Aid on the guidance pages.
None of the COVID 19 grants are flagged in this way. It could be an oversight given the rush this has been done in, but the lack of mention could be considered an indicator it is outside normal State Aid rules.
I think I disagree, the business support grants from local councils are almost definitely considered State Aid, there's a field on the application form from Glasgow Council that checks if you've been in receipt of State Aid, implying, if not confirming, that the grant is considered State Aid.
I have no idea about the Job Retention Scheme though, because there's nothing in the guidance on it yet and applications aren't open.
Just to add to the above, I didn't know that the EA was considered State Aid, so I went and looked it up and while Stepurhan is correct, it's only considered State Aid from 6 April onwards.
While this is relevant to the original question, it does mean if anyone else is, like me, looking at the business support grants and State Aid requirements, the Employment Allowance does not go on the form as State Aid received in the last three years.
THE EA wasn't state aid before 6 April 2020 because there was no financial restriction (there were and still are technical restrictions ) on its availability to employers. Now there is because employers who exceed £100K ERNIC in previous tax year cannot participate .
This MAY explain why CJRS is not State aid because ALL employers with UK employees are eligible so no restriction. HMRC remain silent on the issue as to whether CJRS is state aid or not. Grants under the EU temporary framework cannot exceed Euro 800,000. Employers might receive more than this under CJRS and no mention of a cap has been made so this also is making me think it is not State aid ( opinion .. not a fact)
I have also been pondering this, due to its potential effect on a later R&D Tax Credits claim.
Hopefully, there is more guidance around now but I understand that the JRS grant will not be state aid, as it is available to all. The other grants are restricted to certain businesses and will be state aid.
Surely it shouldn't be classed as state aid because it is solely for the employee since the ER NIC and ER pension part of the grant was knocked on the head. The employer is just the middle man for the CJRS grant to get to the employees, so they are retained in employment and not claiming on the benefits system which would have been totally overwhelmed had millions and millions of people been suddenly laid off.