Considerations for aid recipients

Legal right to state aid

Is there a legal right for businesses to obtain state aid or is the granting of aid completely within the authorities’ discretion?

Subject to any potential arguments based on legitimate expectations generated by the actions of a public body, businesses do not have any general rights to insist on receiving aid. Rather, the granting of aid in the UK falls within the discretion of the relevant authority. In addition, several aid schemes in the UK impose specific eligibility criteria that must be satisfied before a business will qualify to receive aid under the scheme. Public bodies in the UK are required to act reasonably and there may be scope for prospective aid recipients to challenge decisions on this basis.

Main award criteria

What are the main criteria the national authorities will consider before making an award?

The criteria that national authorities consider before deciding whether to grant an award will vary depending on the relevant scheme. The application of such criteria is often clarified in guidance, framework documents or on the administrating body’s website. In cases of ad hoc aid (ie, aid that is granted outside of an established scheme), public bodies will often try to structure aid so that it falls within the provisions of the GBER in order to avoid having to make a formal notification to the  Commission.


Given that the Commission and EU Courts will continue to have jurisdiction over all UK state aid measures in the UK that have been granted before 31 December 2020 (as well as many state aid measures after this time), this practice is likely to continue at least until the end of the Implementation Period.

Strategic considerations and best practice

What are the main strategic considerations and best practices for successful applications for aid?

In order to receive aid under a general scheme, applicants must normally demonstrate that they satisfy the eligibility conditions of the particular scheme. Applicants will often address the relevant eligibility conditions in their initial application, and it is important that application forms are drafted so as to clearly identify how the relevant criteria are met. The exact process for applying for aid often varies depending on the relevant administrating body, and prospective aid recipients should therefore contact the relevant body for information on how to apply for aid. Given the risk of having to recover the aid following a recovery order from the Commission, the granting body will typically be keen to ensure that the proposed aid is compliant with the state aid rules prior to the award.


The EU state aid rules will continue to have limited application to the UK following the conclusion of the Implementation Period, while the future UK Subsidy Control System is likely to include a similar requirement for transparent eligibility criteria to be met. Strategic considerations and best practices for successful applications for aid are therefore unlikely to change significantly.

Challenging refusal to grant aid

How may unsuccessful applicants challenge national authorities’ refusal to grant aid?

Where an applicant has been unsuccessful in applying for aid, it might be possible to challenge the public authority’s negative decision through judicial review proceedings. Such proceedings essentially involve a challenge to the manner in which a decision has been made, rather than the substance of the decision (for example, that the granting authority acted unreasonably or failed to take account of all relevant facts). Further, if the applicant can prove that it has suffered loss caused by the negative decision, it might, in limited circumstances, be possible to lodge an action for damages against the authority in the civil courts.

Involvement in EU investigation and notification process

To what extent is the aid recipient involved in the EU investigation and notification process?

The process for notifying state aid, as well as any potential investigations into aid, will predominantly involve the relevant member state rather than the aid recipient. However, while the aid recipient does not enjoy any formal rights to be involved in the notification or investigation process, in practice the relevant public authority is often willing to engage with the recipient. The aid recipient is particularly likely to contribute to the preparation of the notification form and to be afforded an opportunity to engage with the notification or investigation process where it possesses information or expertise that is required to advance the notification or to address any Commission concerns.


This may well change under the future UK Subsidy Control System with respect to subsidies which do not have to be notified to the Commission but do have to be notified to the UK authority (most likely the CMA). In the event that different government bodies make notifications (as envisaged by the CMA’s earlier draft procedural guidance, which presumed the creation of a state regime largely identical to that of the EU), the approach by each notifying body may well differ from the others. In any event, the requirements of the future UK Subsidy Control System are likely to apply to the granting bodies and not the recipients, meaning that the relevant public body is likely to continue to lead any notification process.


Law stated date

Correct on

Give the date on which the information above is accurate.

13 May 2020.