Appendix D-1 – UK Space Agency General Guidelines and Policy

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We understand that organizations calculate overhead in different ways.

This section offers 4 options for overhead:

  1. No overhead. You can select this option if you are not incurring or requesting a subsidy for your overhead

  2. The 20% labor cost option allows you to claim 20% of your project’s labor costs as overhead. This includes direct and indirect overhead. Selecting this option allows us to review a successful grant application much faster because no further documentation is required from you.

  3. The overhead calculation option asks you to perform calculations to claim direct and indirect overhead. Any value claimed under this method will need to be reviewed by our project finance team if your application is successful. This allows us to assess the appropriateness of the value of the overheads you are claiming.

  4. Where an organization qualifies and requests full economic cost (FEC) recovery, your request must be supported by the latest Transparent Cost Approach (TRAC) submission or equivalent financial data to substantiate the amount requested.

Full overhead recovery or full cost absorption are not eligible.

Please note that once overhead has been calculated and approved, it cannot be exceeded at any time during the life of the project.

For Option 3, you must complete the overhead worksheet and return it with your grant application. The spreadsheet has 2 sections to complete:

Indirect overhead (administrative) costs

Direct overhead costs

Once each section is completed, the “Overhead Total” will calculate your total amount, for review by the UK Space Agency.

1. Indirect overhead (administration)

Selecting the Indirect overhead (administration) link will take you to a template that you will need to complete to calculate these costs.

We classify indirect overhead as costs associated with back-office functions (such as finance, human resources, administrative staff) whose primary function is to support the operation of a business enterprise. Generally, these costs are not directly related to the production of a particular product or service.

Indirect overhead costs may be included if they are incurred directly as a result of carrying out the project. They must be additional, that is, on top of your usual costs. Overhead requests above 20% that cannot clearly demonstrate the additional resource specifically due to the current award will be rejected.

Where you have already identified specific “indirect” individuals working directly on the project, these should have been entered in the labor costs (section) along with their attributable overhead.

We have provided cost categories in the template. The table below gives our definition for each category.

Cost category Definition
Board of Directors and Senior Management The proportion of salary costs (including the employer’s NI) of the company’s board of directors and senior management. This should be where they are engaged in strategic or administrative tasks. Do not include those who work directly on the project or are customer-facing or operational.
Administrative staff Salary costs (including employer NI) for key administrative staff, such as receptionists and central administration. Do not include administrative staff employed to support the sales, marketing, account management and profit generation departments.
Human resources staff Salary costs (including the employer’s NI) of human resources personnel.
Personnel of salaried domains Salary costs (including employer NI) of staff employed in cleaning, maintenance, security and other areas.
Finance staff Salary costs (including employer NI) of key finance department personnel, such as payroll, accounts payable and receivable. Do not include personnel employed to support sales, marketing or account management activities.
Costs of temporary/interim administrative support staff This should include fees paid for the provision of temporary staff in the administrative or support services listed above. Do not include operational personnel, such as marketing, sales, engineering, quality assurance, research and development, and supply chain.
General Office IT Services Include general IT services used throughout the organization. Do not include IT costs when they relate only to ineligible personnel or to manufacturing, production or paid activities.
General postage Include postage and courier costs for general administrative purposes. Do not include product delivery or postage costs incurred in connection with promotion, sales, customer relationship marketing or account management.
Office supplies, printing and stationery costs Stationery and general office supplies such as paper, business cards, business stationery, office equipment for support/administrative staff listed above. Do not include specific costs associated with sales, marketing, product delivery, product documentation, or reporting.
Security and safety costs Include costs associated with site and staff safety and security, including signage and health and safety costs.
Building maintenance: administration office facilities only Include overhead costs for the repair and maintenance of administrative facilities. Do not include repair and maintenance of manufacturing/production facilities and exceptional items such as new work or extensions that cannot be included in this section.
Rental of the building: administrative premises only When office space is rented, include rental costs. Do not include rental costs related to manufacturing/production facilities and the cost of any deposits or penalties.
Contracted Site Services: Admin Desktop Installations Only Costs of contractual services related to administrative facilities such as office cleaning. Do not include costs for contractual services related to manufacturing/production facilities.
Site property taxes: administration office facilities only Property taxes and charges relating to office space. Do not include property taxes and manufacturing/production facility charges.
Utilities: Administration office facilities only Electricity, gas, water, waste disposal, telecommunications costs related to administrative premises.

The following is a step-by-step guide to help you fill in the relevant details to make your indirect overhead expense claim.

2. Column A

Starting with your latest set of audited accounts, please enter your details against the relevant cost category in column A. If you are a new business or this information is not available, please use internal management accounts or forecast data.

Note that for the administrative support staff costs section, the costs included here must be based on PAYE (gross salary, NI, company pension contribution, life insurance). They should exclude discretionary package costs such as bonuses, rewards, PRP and dividends. Also, please exclude any members working directly on the project who are in contact with customers or those who are engaged in operational/production areas.

3. Column B

In this column, you must detail the proportion of the costs indicated in column A that represent the basic administration activity. You must follow the definitions and eligibility criteria described in the cost category table above. You can use a percentage.

4. Column C

In column C, please indicate the percentage of these costs that you would estimate to be additional administrative activity and directly attributable to the project you are undertaking. By additional, we mean beyond the usual and grant-specific activities.

5. Column D

Based on the details you gave in the previous columns; column D will automatically calculate the costs you have indicated as attributable to this project.

6. Column E

In column E, you will need to provide a description of the cost elements.

Once you have filled in this data, you will see a percentage calculation (column F). This calculates what you consider to be eligible indirect overhead costs for your project (D) in proportion to the annual audited figures (A). To save you time, we take this calculated percentage and apply it to the remaining cost categories you’ve completed.

Any administrative costs which are not eligible in this section, but which are directly linked to the project (eg based on invoices), must be claimed as direct costs in other sections of the funding form.

Completing the indirect overhead model will calculate an annual total that will be proportionate to the duration of your work on the project. You will see a cost per year, per month and per project. The costs per project will form your total indirect overhead costs in monetary value.

Once you have filled in your indirect overhead information, choose the “back to overhead section” to return to the main overhead section. Here you will see a summary of your indirect overhead costs.

seven. Direct overhead costs

Selecting the Direct Overhead Costs link will take you to a template you will need to complete to calculate these costs.

We understand that in undertaking a project you may incur costs associated with personnel working directly on the project. We call them direct overhead. Typical costs in this area could include direct staff provision of laptops (non-capital only), desks, offices (such as occupancy, facilities and utilities) and infrastructure and systems computers. This section is provided in a free format to allow you to list these costs.

Direct overhead should be directly attributable to the project you are undertaking and should not represent a full payback methodology that includes redundant time or spare capacity costs.

You should itemize the costs and include a description of each item and the methodology or allocation basis used. This should include calculations that support reimbursable costs. This will help us validate these costs if your project is successful. If your costs have been independently audited, we may ask you to provide this report to support our financial eligibility reviews.

Please note that costs associated with labs or workshops must be included in the other costs section of the application form.

Once you have completed the direct transparencies, you must select “return to transparencies section”. You will return to the main overhead section where you will see a summary of your overhead request for direct and indirect overhead.

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