Can your company claim R&D Tax Credits alongside a grant?

Start your tax relief claim now – Call 01606 369000

The R&D tax initiative works by providing an enhanced additional tax deduction for the costs incurred in undertaking qualifying research and development. If you are looking to make a claim it is important to understand the qualifying criteria for your claim to be successful.

When considering R&D tax credits and grants for a project, you may need expert advice to assist with navigating and planning the process as it can become complicated. Don’t be fooled by the misconception that R&D tax credits and grants cannot work together as both can provide a much-needed boost to your project, however, depending on the grant aid you are using it may impact the amount of R&D tax relief you can claim.

There are two types of R&D tax credit schemes; SME and RDEC (Research and Development Expenditure Credit), and depending on the details of the grant you may find that only one will be beneficial to you. Due to European rules which aim to stop a company gaining an unfair advantage of the single market by limiting the level of state aid a company can receive, many types of grants and the SME scheme are considered state aid and can, therefore, lower the amount of R&D tax credit you could receive. The RDEC scheme (often lower return of the two R&D Tax credit schemes) is not considered state aid and is often the way forward when claiming R&D with grants.

Innovation grants can range between £25,000-£10 million with most considered as state aid and will affect an R&D tax claim. However, there are a number of government grants not considered state aid due to them being under the de minimis threshold: known as De Minimis Grants. A number of European grants are also not classed as state aid however these may differ after the results of Brexit.

Plan carefully to make sure you get the most out of your R&D Tax claim when also applying for grants. At the R&D Co we want to help more businesses understand what R&D tax credits are and what the benefits could be for their company.


Please contact us on 01606 369000 for any questions you may have about making a claim for R&D.