Research And Development Grants – How Do They Affect Your Right To Claim R&D Tax Credits?
Public sector grants used for research and development and research and development grants are either “state notified” or not, and the awarding organisation will confirm which applies, so if you have received a grant and you are not sure if it is “state notified” ask your funders.
In general State Notified Grants have the affect of wiping out any claim for Research and Development Tax Credits for the same project, regardless of the amount of the grant.
Where a grant is not “state notified” the research and development grant funding amount should be deducted from any qualifying expenditure relating to your claim for research and development tax credits.
There are some specific regulation around the receipt of Technology Strategy Board (TSB) Grants. TSB provides support for collaborative R&D programmes, through a competitive process on behalf of the UK Government Department for Business, Innovation and Skills (BIS). Companies can claim for their own spend on these programs, subject to meeting other R and D Tax Credit requirements – more detail is available here.