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Taken for Granted: Tax credits still on the table PDF Print E-mail
Tuesday, 29 November 2016
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. 

Jumpstart, the UK’s leading Research and Development (R&D) tax credit specialist, helps UK businesses maximise their tax credit entitlement. At present, the company is identifying nearly £1m* in eligible activity every single week for its clients.

With some accountants mistakenly advising that receipt of any grant precludes a claim under the R&D tax credit programme, Jumpstart Client Engagement Manager, Ian Donaldson, is keen to clarify the situation.

“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.

Mr Donaldson said: “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.”

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