Can I make an R&D claim If I have received other funding for my work?
A common misconception is that the receipt of grants or subsidies preclude a Research & Development (R&D) claim from being made. Thankfully, this is not the case, with R&D claims and grant/subsidies not being mutually exclusive. However, the interaction between the two can be complex and care must be taken when applying for funding to ensure that its impact on your R&D claim is negated as far as possible.
Why do grants affect
an R&D claim?
If you are a Small and Medium Enterprise (SME) making an R&D claim under the SME incentive, simply speaking, the rules state there where you have received additional funding towards an R&D project via a grant or subsidy, some or all of the R&D project funded by the external funding must instead be claimed under the RDEC incentive.
This can negatively impact the value of your claim as compared to the SME incentive, the RDEC incentive is less generous and more restrictive in terms of what subcontractor costs can be included.
If you are claiming under the RDEC incentive from the outset, obtaining external funding will have no impact on your R&D claim.
How do grants affect
an R&D claim?
Should you receive a grant, how much of your claim must be under the RDEC incentive depends on several factors including:
What is the purpose of the grant? – Where the grant funds your R&D projects, it is probable that a proportion of your R&D claim will need to be under the RDEC incentive.
Is the money received notified state aid? – Any project funded to any extent by a grant which is deemed by the EU as notified state-aid must be claimed under the RDEC incentive in its entirety. Whereas, a project funded by a non-notified state aid grant needs only be claimed under the RDEC incentive up to the amount of money received.
How can we
help you?
At Cornelius Consultancy, we understand that grants and subsidies are a vital part of our client’s toolkit to support their growth and we would always recommend that where possible they explore such avenues if appropriate to their circumstance.
However, given the complicated relationship between an R&D claim and such funding, we would always recommend that you speak to us during the application process, as we can provide specialist advice which will enable you to avoid the common pitfalls that arise as a result of poorly worded grant documentation severely restricting and potentially entirely prohibiting an R&D claim.