Glossary · UK
What is De Minimis State Aid?
A threshold below which EU-derived state aid rules permit governments to offer companies assistance without notifying the European Commission. The threshold is EUR 300,000 over three years per undertaking. The Employment Allowance is subject to de minimis state aid rules.
Full Definition
De minimis state aid refers to a level of government financial assistance below which the rules on state aid (government subsidies that could distort competition) do not require notification or approval. The concept originates from EU state aid law; although the UK left the EU, equivalent domestic provisions were introduced through the Subsidy Control Act 2022. For most sectors, the de minimis threshold is EUR 300,000 (approximately £255,000) of subsidy per undertaking over a rolling three-year period. Lower thresholds apply for certain sectors: approximately £315,000 for agriculture and £245,000 for fisheries and aquaculture. The Employment Allowance — worth up to £10,500 per year from April 2026, allowing employers to reduce their Employers National Insurance liability — is classified as de minimis state aid. Employers must self-certify each year that claiming the Employment Allowance will not cause them to exceed the applicable de minimis threshold. For most small and medium-sized UK businesses, the threshold is unlikely to be breached. However, businesses that receive other forms of government financial support (grants, subsidised loans, guaranteed loans, tax reliefs) must aggregate all de minimis subsidies to check they remain within the limit. Connected undertakings (groups under common control) must aggregate their de minimis subsidies together. Records of all subsidies received must be kept for at least three years to demonstrate compliance if HMRC enquires.