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Understanding the Seventh Framework Programme
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Q: Are in-house consultant costs to be considered as eligible costs in FP7?
A: Consultants are natural (physical) persons, working for one or more beneficiaries in an FP7 project. They are either self-employed or they may be working for a third party. There are 3 possible ways of classifying the costs of in-house consultants (in any events costs will only be eligible if they fulfil the conditions listed in Article II.14 of the model grant agreement.
1) They can be considered as personnel costs regardless of whether the intra-muros consultants are self-employed or employed by a third party if the following cumulative criteria are fulfilled:
- the beneficiary has a contract to engage a physical person to work for it and some of that work involves tasks to be carried out under the EC project.
- the physical person must work under the instructions of the beneficiary, ie the work is decided, designed and supervised by the beneficiary. The physical person must work in the premises of the
beneficiary (except in the case of teleworking agreed between both parties).
- the result of the work belongs to the beneficiary (Article II.26 of the FP7 model grant agreement;
- the costs of employing the consultant are not significantly different from the personnel costs of employees of the same category working under labour law contract for the beneficiary
- travel and subsistence costs related to such consultants' participation in project meetings or other travel relating to the project would have to paid directly to the beneficiary in order to be eligible.
2) Costs relating to consultants can be considered as subcontracting costs if the beneficiary has to enter into a subcontract to hire these consultants to perform part of the work to be carried out under the project and conditions set out in the FP7 model grant agreement in particular if the provisions of Article II.7 of the model grant agreement relating to subcontracting are fulfilled. In these cases, the beneficiary's control over the work to be performed by the subcontractor is determined by the nature of the subcontractor - the subcontractor does not usually work on the premises of the beneficiary and the terms of the work are not so closely carried out under the direct instruction of the beneficiary.
3) The third possibility is that the consultant participates in the project as a beneficiary (either as a physical person or possible as an SME if meets the definition.
FP7 (Seventh Framework Programme) , Contracts and legal issues