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Wednesday, March 19, 2014

HORIZON 2020: simplification of costs calculation

Research, Industry, Innovation, New technologies, SME Policy, Research centres, Local and Regional authorities, Corporations, Administrations States, SMEs, Universities,

The Horizon 2020 Framework Programme represents a completely new and wide-ranging scheme and method of EU's research and innovation funding policies. The set of rules of this new programme are designed to implement the innovative approach in a way that researchers and businesses can profit from it to the maximum of extent.

The new requirements ensure that the three key objectives of the new Framework Programme, i.e the integration of support to innovation, the coherence of the rules and the simplification for the benefit of participants will be guaranteed.
The most important aspect of this reform is in fact the simplification of its whole ... Read more

The Horizon 2020 Framework Programme represents a completely new and wide-ranging scheme and method of EU's research and innovation funding policies. The set of rules of this new programme are designed to implement the innovative approach in a way that researchers and businesses can profit from it to the maximum of extent.

The new requirements ensure that the three key objectives of the new Framework Programme, i.e the integration of support to innovation, the coherence of the rules and the simplification for the benefit of participants will be guaranteed.
The most important aspect of this reform is in fact the simplification of its whole system of architecture, rules, procedures and control strategy around which is constructed. It was conceived in order to be a magnet for top researchers and for the most groundbreaking enterprises.

What is one of the most innovative examples concerning the simplification reform in Horizon 2020?

Costs in Horizon 2020 can now be stated and claimed in four different ways, namely as actual costs, unit costs, flat rates or lump sums. This has been obviously implemented in compliance of the new Financial Regulation, adopted in October 2012 by which the European Commission simplified the calculation of costs related to European projects. Indeed, all EU-funded projects will adopt one or more of these four types of costs.

The main peculiarities of these four cost categories are as follows:

Actual costs cover the real costs incurred in a project. To count as actual, these costs have to be identifiable, verifiable and recorded in the accounts of the beneficiary. Actual personnel costs can be claimed based on the calculation method given in the Annotated Model Grant Agreement, which defines three possible hourly rates to be used. A newness compared to FP7 rules is the eligibility of non-deductible value-added tax (VAT).

Unit costs represent a fixed amount per unit of measure. In specific cases, personnel costs also fall in this category and can be declared based on the beneficiary’s usual accounting practices. For example, Owners of small and medium-sized enterprises (SMEs) who do not receive a salary may claim their personnel costs in this form. Also, Marie Skłodowska-Curie Actions use unit costs to cover the salary expenses of the researchers.

Flat rates consist of a percentage that is calculated on a given basis. In Horizon 2020, the flat rate is currently only used for claiming indirect costs. This flat rate has been set to 25% of direct eligible costs.

Lump sums are a single amount to cover one or several cost categories. The conditions for the use of lump sums and the related amounts are described in the Work Programmes. One example of a lump sum is the funding of Phase 1 in the SME Instrument, in which successful candidates receive 50 000 euro to carry out a feasibility study.

It is useful to remind that the Annotated Model Grant Agreement replaces the FP7 Guide to Financial Issues. Neither of these two documents is legally binding. Because it is "only" a guidance document, the Annotated Model Grant Agreement can be changed at any time. Make sure you always refer to the latest version available in the Participant Portal. Hide

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