DeMinimis State aid Process

Purpose

This document sets out the key elements of DeMinimis state aid, a public funding source thatallows small amounts of aid to be given based on the assumption that the amounts are too small to distort or threaten to distort competition.

What De Minimis Includes

De Minimis is aid provided by public funds, but does not include aid provided by block exemption regulations or approved State Aid schemes.

Threshold

Each business is allocated a maximum threshold of €200,000[1] under De Minimis over three fiscal years.

Compliance with De Minimis requirements;

  • De Minimis allows aid up to €200,0001 to be provided to an enterprise regardless of size.
  • There are restrictions with De Minimis for undertakings with road transport, the maximum threshold being €100,0001.
  • De Minimis aid cannot be given to enterprises within the agriculture, fisheries, aquaculture and coal sectors, undertaking for firms in difficulties, or for directly export-related activities within the third countries or member states.
  • De Minimis aid cannot be given towards similar activity that is supported by other block exemption or notified scheme which means that the block exemption or notified scheme thresholds would be exceeded.

Process

There are three key elements in managing the state aid process:

1)Eligibility Declaration

2)Declaration of the value of previous aid

3)Annual Statements and review of cumulative value of aid

Datais collected on an annual basis to ensure that the businesses being assisted under the Programmeremain eligible and do not exceed the De Minimis threshold.The excerpts below provide example text for inclusion in Business Registration/Engagement Forms.

1. Eligibility Declaration – This is required to confirm that the businesses being assisted are SMEs and are therefore eligible for support. Example text for inclusion in the registration form is set out below; however, please refer to standard registration forms for the latest text version.

We declare that no more than 25% or more of the capital or the voting rights of the company applying for support, is owned by any other enterprise or jointly by several other enterprises, which fall outside the definition of an SME (see below), AND that the applicant enterprise and any partner or substantial shareholder in it, is NOT associated, related or in any other way connected with any other enterprise(s) whose total number of employees, turnover, and balance sheet, when aggregated with those of the applicant does not satisfy the criteria below:

(a) We have 250 or fewer employees (worldwide, including partners andexecutive directors)

(b) Annual turnover does not exceed EURO 501 million(Approx £44m, September 2011), or an annual balance sheet not exceeding EURO 43million(Approx £38m, September 2011)

(c) The support, when aggregated with all other public aid given to thecompany over a rolling 3 year period, does not exceed EURO 200,0001.

2. De Minimis Declaration–This is to obtain the values of state aids received over the last three years from the businesses being assisted. This information is then held by the delivery partnerand consolidated within a central database.An example statement for inclusion in Business Registration/Engagement forms is provided below; however, please refer to standard template documents for the latest text version

I have read and understood the regulations regarding De Minimis Aid and I am aware that there is a ceiling of 200,0001 Euro (for all De Minimis aid provided to any organisation over a three year period. (See Please see a list of De Minimis Aid received over the last three years below:

Source of Aid Amount(£)Date

1.

2.

3.

4.

3. Value of Assistance- Communicate to the businesses participating within the programme the value of assistance provideddirectly to them.

An example of wording to be included within the letter communicating the value of assistance to businesses can be found within the ENWORKS DeMinimis Letter Template.

De Minimis Value Methodology

A written methodology is to be kept on file which explains how the value of the De Minimis to each business is calculated. This reflects all the costs associated with delivering to the businesses, and includes, for example:

Delivery staff hourly rate multiplied by the hours worked with the business (site visits, research, report writing), plus any consultancy work, travel costs etc.

Euro Conversion

Appropriate records must be held that record the State Aid DeMinimis value being provided to businesses in both €s and £s. This should also be held on file and included within the DeMinimis Declaration letters provided to businesses.

Guidance from funders recommends that the Euro exchange rate used in the conversion is taken from the first date of assistance provided to the business within that particular financial year.

Audit Trails

  • De Minimis Statement - On an annual basis, each recipient is given a statement detailing the value of state aid and its purpose. It should make reference to the De Minimis regulation (Commission Regulation (EC) No. 1998/2006).
  • De Minimis Rationale - A rationale is to be kept on file explaining how the value of state aid is calculated for each business assisted through the programme, including how the Euro Conversion rate has been applied.
  • De Minimis Declaration - Each recipient is required to declare what state aid they have received over the previous three years. This should include the details of each individual intervention in terms of value, source of aid and the date aid was given. As there are many different types of aid, it is important that there is clarity over the type of aid received. This should be requested from the business recipient on an annual basis through the Business Registration/Engagement Forms.
  • De Minimis Database - A central database of ‘De Minimis state aid’provided to businesses is to be kept by the organisation providing the support. The value of De Minimis aid received via other sources should also be recorded to allow the cumulative value of aid to be tracked

ENWORKS De Minimis Guidance v2 (Nov 11).docx

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[1]This is the threshold as at Sept 2011; however the threshold is subject to change and should be checked at appropriate intervals