What is Subsidy Control?
11th December, 2025
Subsidy Control is the legal regime that regulates how public authorities in the United Kingdom may use their funds, rights and assets in regard to businesses and other organisations engaged in economic activity.
The failure to comply with Subsidy Control law may lead to a challenge in the Competition Appeal Tribunal and the recovery of a sum equal to the financial benefit provided from the beneficiary of the subsidy.
What is a subsidy under the Subsidy Control regime?
A ‘subsidy’ is defined under the Subsidy Control Act 2022 as any financial assistance with the following characteristics:
(a) given, directly or indirectly, from public resources by a public authority;
(b) conferring an economic advantage on one or more enterprises;
(c) is specific in that it benefits one or more enterprises over one or more other enterprises with respect to the production of goods or the provision of services; and
(d) has, or is capable of having, an effect on:
(i) competition or investment within the UK;
(ii) trade between the UK and a country or territory outside the United Kingdom; or
(iii) investment as between the UK and a country or territory outside the UK.
The meaning of the terms within this definition is further clarified through developing case law and the Subsidy Control Statutory Guidance.
When can a subsidy be lawfully awarded under the Subsidy Control Act 2022?
When a subsidy is present, this may still be awarded under the UK’s Subsidy Control regime, provided that specific requirements are satisfied.
This includes there having been a comprehensive review of the relevant sections of the Subsidy Control Act 2022 that relate to prohibited categories and satisfying one of six routes, these being:
- Minimal Financial Assistance;
- the Subsidy Control Principles;
- Streamlined Routes;
- existing schemes;
- Services of Public Economic Interest Assistance; and
- Services of Public Economic Interest.
It is also necessary to assess the applicability of trade agreements, in particular the Windsor Framework upon the proposed transaction.
When must a subsidy be referred to the Competition and Markets Authority?
There is a legal duty under Section 52 of the Subsidy Control Act 2022 to refer a Subsidy of Particular Interest (“SoPI”) to the Subsidy Advice Unit within the Competition and Markets Authority for review.
A SoPI arises when it is planned to award a subsidy (or to create a subsidy scheme which will be used to award a subsidy in due course) with a value that:
- exceeds £25m;
- exceeds £5m and relates to a sensitive sector;
- exceeds £1m and will fund relocation activities;
- exceeds £1m and will fund restructuring activities; or
- exceeds £1m and the cumulative value of the related subsidies awarded in the last three years exceeds £25m (£5m if within a sensitive sector)
As of November 2025, the sensitive sectors are:
- manufacture of motor vehicles;
- building of ships and floating structures;
- manufacture of motorcycles;
- manufacture of air and spacecraft and related machinery;
- production of electricity;
- manufacture of basic iron and steel and of ferro-alloys;
- aluminium production; and
- copper production.
Why should you commission Ward Hadaway to help you with Subsidy Control compliance?
Ward Hadaway is one of the UK’s leading law firms for Subsidy Control law.
Experts include Alexander Rose whose experience includes advising the Parliamentary Select Committee designing the regime and advising on multiple referrals to the Competition and Markets Authority.
Ward Hadaway can assist you in all matters relating to Subsidy Control, including providing opinion letters, drafting Grant Funding Agreements and training.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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