Did you know that in 2012, the European Commission (EC) set up a programme to modernise state aids which included the requirements for transparency across the EU, that will publicise the names of companies that received Grant Funding over certain limits.
From 1 July 2016, details of the state aids and Grant funding’s received by beneficiaries will be collected by HMRC and passed on to the EC. Finance Bill 2016 contains a measure to provide HMRC with the power to allow HMRC to monitor and evaluate state aid tax reliefs and other tax advantages, and share certain information with the EU through a legal gateway for the purpose of complying with EU obligations.
If a company receives an aid – Grant Funding of €500,000 or more the company name and some details will be published online. The details published will include sector, region and whether the company is SME or a large company. The sector applies to the industry the company operates in as opposed to the relevant sector for the specific R&D project. The amount of the aid will also be published in banded amounts – €0.5m to €1m, €1m to €2m, €2m to €5m, €5m to €10m, €10m to €30m, and greater than €30m. The information will be published by the later of 12 months from receipt of the information or 12 months from 1 July 2016. The commission will also require a ‘purpose of aid’ this will be a generic statement and will not divulge any case specific details of the R&D project.
The change is only relevant to a few hundred companies who receive over €500,000 aid in Grant Funding. As a precaution, and to ensure claims are paid, HMRC recommends that companies lay out the categories of state aid information separately in their covering letter.
The €500,000 is for each return period, so one project can receive several different state aids over the course of several years totalling over €500,000 but not be published so long as each claim is below €500,000.
Many Companies are also unaware that you can still make a claim for R&D tax relief even if they are in receipt of Grant funding. Although not as generous as the SME tax relief, you could claim under the Research & Development Expenditure Credit (RDEC) scheme that provides an 11% tax credit on R&D expenditure – even if you are a profit making company.
The Innovation Taxes team here at Shorts have already submitted many claims for such companies. Please contact our Innovation Taxes Team and we can provide free initial advice on this and to see if your company could make a claim for R&D tax relief.
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