Knowledge Base: State Aid, De Minimis Aid & Minimal Financial Assistance (MFA)

Why this matters

If you’re building a startup in the UK, you might apply for grants, university funding, or local support schemes alongside SEIS/EIS investment.

What many founders don’t realise is that some of these grants count as “state aid” (or “subsidies” under UK law).

That matters because:

• There’s a cap on how much “state aid” your company can receive.

• Certain types of aid reduce how much you can raise under SEIS.

• You need to be able to tell HMRC and investors what you’ve already received.

In short: knowing whether your grant is De Minimis or MFA helps you avoid surprises later, especially when raising your first investment round.

The basics

Public money that helps your business - from Innovate UK, a university, or a local authority - is often treated as a subsidy.

There are different categories depending on how big the support is and who provides it.

SEIS, EIS & grants - how they interact

In plain English: Only de minimis aid reduces your SEIS allowance. MFA doesn’t.

How to check what you’ve got

• Ask your grant provider “Is this de minimis aid or MFA?”

• Get it in writing – they must tell you.

• Keep every grant letter – HMRC may ask for proof when approving SEIS.

Quick examples

Founder tips

• Keep track of all public grants (type + amount + date).

• Ask each provider if it’s de minimis or MFA.

• If planning SEIS, leave headroom below £250k.

• Store all confirmation letters for 10 years.

• When unsure, ask your accountant or lawyer.

Simply:

SEIS = de minimis aid. MFA ≠ de minimis aid.

Only de minimis grants reduce your SEIS headroom.