Minimal Financial Assistance (MFA)

Minimal Financial Assistance (MFA) is a rule in the Subsidy Control Act 2022 that allows public authorities to give small amounts of financial support without needing to go through the full subsidy control assessment. Under the previous European funding regime, this was known as ‘de minimis.’

While this is a quick way for statutory agencies to deal with subsidy control, the limits for any funding given in this way is quite small. If all funders start to give funding in this way, larger organisations will very quickly meet their MFA allowance, and will not be able to access any further statutory MFA funding.

Therefore, it is very important that organisations are very clear on what MFA is and how to fill in the form correctly, and that they keep appropriate records.

Key issues

The limit is £315,000 over 3 years

• An organisation can receive up to £315,000 in total from public authorities across the UK over any rolling 3-year period
• This includes the current financial year plus the previous two

It must still be a subsidy

• MFA only applies if the support meets all four subsidy criteria (public money, economic advantage, selective, and impact on trade/competition)
• If it doesn’t meet those, then it’s not a subsidy and doesn’t need MFA

Written notification required

• The authority must tell the recipient in writing:
• That the support is being given as Minimal Financial Assistance. You cannot be retrospectively told that funding is MFA
• How much is being given
• That it counts toward their £315,000 limit

Recipient must declare past aid

• Before giving MFA, the authority must ask the recipient to declare any other subsidies they’ve had under MFA in the last 3 years.
• This is to check they won’t go over the limit.

How will I know if funding is being offered as Minimal Financial Assistance?

When you are given your offer of grant, you will be asked to agree to a clause that is similar to the one below:

The [Public Authority] offers [Enterprise] a Minimum Financial Assistance (MFA) subsidy under the Subsidy Control Act (2022), subject to your agreement to, and compliance with, the terms and conditions set out below [relating to MFA and any other terms of the subsidy specified by the public authority].
The [gross] amount of MFA offered is [£INSERT].
Before making the payment, we require written confirmation that receipt of the payment will not exceed [Enterprise’s] MFA threshold of £315,000 cumulated over this and the previous two financial years, as specified in section 36(1) of the Subsidy Control Act (2022).
This means you must confirm, by completing the section marked “Confirmation” below and returning a copy of this MFA Notification to us, that you* will not have received more than [£315,000 minus the value of the subsidy] in MFA subsidies or comparable types of subsidies (see section 42(8) of the Subsidy Control Act) between 1 April [year beginning the calculation period] and the date of receipt of this payment.
Confirmation must be sent by someone who is authorised to do so on behalf of your organisation.
Confirmation
I confirm, for and on behalf of, [Enterprise] that receipt of MFA of [£x] from [Public Authority] will not exceed [Enterprise] MFA threshold specified in section 36(1) of the Subsidy Control Act (2022).

Third sector organisations need to:

• Maintain a spreadsheet or other document noting all the funding they have received that they have been told is being offered as MFA;
• Only include this information if you are asked to give a breakdown of how much MFA you have had to date. Do not include all funding you have received from statutory sources in your calculations, only funding that has been specifically labelled MFA.

Further resources and links

UK Government - Subsidy Control a guide for beneficiaries

Scottish Government Subsidy Control - Guidance

The Scottish Government Subsidy Control team can be contacted at subsidycontrol@gov.scot