State aid rules and coronavirus (COVID-19)

On 19 March 2020 the European Commission adopted the Temporary Framework for Covid-19 which was amended on 3 April, 8 May, 29 June and 13 October.

You can find information on the Temporary Framework on the European Commission website.

From 1 January 2021, all subsidies provided by public authorities in Northern Ireland must comply with either the EU State aid rules or Chapter 3 of the EU-UK Trade and Cooperation Agreement.

UK State aid scheme - COVID-19 Temporary Framework for UK authorities

On 6 April 2020 the European Commission approved the UK umbrella scheme to support businesses affected by the Coronavirus outbreak. On 28 April 2020 the European Commission approved an amendment to the scheme which allows for pricing guarantees on loans to be charged on a stepped basis over three years rather than at a flat rate to allow for greater scheme flexibility. An second amendment was approved on 31 July 2020 to allow micro and small businesses to receive support even if they were an undertaking in difficulty on 31 December 2019. A further amendment was approved on 8 December 2020 to increase the overall budget, to provide for subordinated interest rates for loans under section 3.3.of the Framework and to provide support for uncovered fixed costs as set out in section 3.12 of the Framework.

UK Prolongation of the use of the Temporary Framework

The use of the Temporary Framework has been prolonged until 30 June 2021, this prolongation only relates to aid that is within the scope of Article 10 of the Northern Ireland Protocol.

If an aid measure is not within the scope of the Northern Ireland Protocol i.e. because it is targeted at the service sector, public authorities must comply with the provisions on subsidy control set out in Chapter 3 of the UK-EU Trade and Cooperation Agreement.

Public authorities should refer to the guidance on State aid rules after EU Exit for further information and contact DfE State aid unit for further advice.

State aid guidance on the Covid-19 Temporary Framework

The department has issued guidance which summarises the types of aid allowable under the UK measure. In addition, the guidance contains:

  • a checklist setting out the relevant conditions that must be adhered to when granting aid
  • a template letter to send to recipients of aid to ensure they are eligible to receive support  

 

Back to top