Many businesses are not aware that they can still apply for, and receive, research & development (R&D) tax credits from HMRC despite securing SMART grant or other forms of investment grants.
We help UK businesses maximise their tax credit entitlement and at present, Jumpstart is identifying nearly £1million in eligible activity every single week for its clients.
Some accountants mistakenly advise that receipt of any grant precludes a claim under the R&D tax credit programme, and while it is true that grants of any sort can affect R&D claims, even non-R&D related ones, they certainly don’t prevent companies from claiming.
It can be a complex field of tax law. My advice is, seek expert advice before making any R&D tax claim.
It is not simply the case that being in receipt of a grant stops a firm claiming.
To summarise: grants and subsidies can move a portion of a small or medium-sized enterprise’s project from the HMRC SME-level scheme to the Large Company-level scheme.
So it is possible for SMEs to make an R&D tax credit claim under both schemes for one or more projects.
There are a number of possible grants available to innovative companies, such as SMART Grants, available to SMEs for R&D projects and feasibility studies; Regional Selective Assistance (RSA) Grants, for projects taking place in Scotland; European Union funding programmes, presently still accessible; and Innovate UK Grants.
As a rough rule of thumb, if an SME has received State Aid, the project’s claims may have to be processed through the Large Company scheme, but if the grant is not notified State Aid, the R&D tax credit claim may be split between the Large Company and SME scheme.