Four limb test - is it a subsidy?

If your answer to all 4 of the following questions is ‘yes', your assistance is a subsidy. If one or more of your answers are ‘no’, it is not a subsidy. If you are unsure, more detail is provided in the statutory guidance -gov.uk website in the further help section, or for advice please contact the Subsidy Control Advice Unit.

1. Is the financial assistance given, directly or indirectly, from public resources by a public authority?

• ‘Public authority’ includes any entity which exercises functions of a public nature. This includes public authorities at any level of central, devolved, regional or local government and non-governmental bodies that are performing a public function.
• ‘Public resources’ include public funds that are administered by the UK government, the devolved governments, or local authorities, whether they are given directly, through public bodies (such as agencies), or through private bodies.

2. Does the financial assistance confer an economic advantage on one or more enterprises?

• The recipient must be an ‘enterprise’: any entity engaged in an economic activity, which means offering goods and services on a market.
• The financial assistance must confer an 'economic advantage', meaning that it is provided on favourable terms. Financial assistance will not confer an economic advantage if it could reasonably be considered to have been obtained on the same terms on the market.

3. Is the financial assistance specific? That is, has the economic advantage been provided to one (or more than one) enterprise, but not to others?

• This covers financial assistance that is provided to specific beneficiaries determined on a discretionary basis by the government, as well as assistance that benefits (directly or indirectly) only enterprises in a particular sector, industry or area, or with certain characteristics.

4. Will the financial assistance have, or is it capable of having, an effect on competition or investment within the UK, or trade or investment between the UK and another country or territory?

• To constitute a subsidy, the assistance must have a genuine effect that is more than incidental or hypothetical on competition or investment in the UK, or on international trade or investment.

Further Information

• Minimal Financial Assistance (MFA)
• Services of Public Economic Interest - (SPEI)
• Streamlined Route
• Principles Route

For more information or for further advice please contact the Subsidy Control Advice unit.