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R&D tax credits and Grant Aid

R&D tax credits and Grant Aid

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Can a company claim R&D tax credits for the first half of an accounting period, where they have submitting a grant claim for the second half of an accounting period?
Guidance on the HMRC website seems to suggest the company can't: CIRD81670 "Where an R&D project has received funding which is a notified State aid then no expenditure by the company on that project can qualify for the R&D SME relief".
Thanks in advance.

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25th Mar 2015 13:37

Apologies for grammatical errors - typing on a mobile phone.

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By Duhamel
25th Mar 2015 13:48

HMRC's website states the grant funded project can't qualify for the SME scheme. It can qualify for the large company scheme. The company can split out different projects and submit R&D claims for both schemes.

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By Dib
25th Mar 2015 13:49

Assuming it is an SME claim then the CIRD says it all - almost!

Two questions:

1.  Is it state aid or another non-state aid grant?

2.  Does the grant cover all the company's R&D or just an element of it (e.g. funding for a sub-project or for one project while the company carries out a number of R&D projects)?

If it is state aid for the entire R&D then you could consider a large company claim instead...

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By Gilly
25th Mar 2015 14:09

Check the grant

You may already know this, but the key word is 'notified'.  Not all grants are notified state aid, especially small-value ones.  You may need to check the grant document, or check with the provider of the grant.  Most of the grants I've seen have been de-minimis, and we've successfully claimed R&D tax credits.  De-minimis funding doesn't prevent you claiming R&D tax credits, as long as the total received, including the R&D tax credit claim, is within the de-minimis limit. 

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