Notified State Aid?
If a company has received notified State Aid it cannot make an R&D claim under the SME scheme.
This usually relates to grants or funding received from government or state bodies (or their partners) and it has been notified to, and approved by the European Commission.
Examples include Government funded grants such as Smart Grants and Innovate UK.
You should refer to grant/funding letters/offers to check if it is notified State Aid.
De Minimus Aid
If a company has obtained funding of less than EUR200,000 over 4 years this might qualify as De Minimis Aid.
In this case, it cannot claim SME R&D tax credits for costs that have been funded by the De Minimis Aid. But it may be able to claim for excess costs that aren’t funded by the aid.
Where a company has received grants or subsidies apart from notified State Aid, then the subsidised expenditure will not qualify for R&D tax relief. However, care should be taken to allocate the grant/subsidy accurately within the business as its possible that it may not relate completely to the R&D project.
Total aid to project
The total aid must also be below EUR7.5m for any one R&D project.
Key legislation: CTA09/Ss1052(6), 1053(5) and 1138, CTA09/Ss.1113 – 1118