We have received several queries from concerned clients and accountants highlighting that the CBILS is state aid and wondering how that impacts R&D claims.
If the CBILS relates specifically to the company’s R&D expenditure [on a project] rather than being intended more generally to support the company, then this could impact your R&D claim. This is because the Government has notified CBILS as a State aid under the European Commission’s new Temporary Framework for COVID-19. The measure is a fully notified aid, so the restriction on receipt of other State aid (s1138(1)(a) CTA 2009) potentially applies.
Therefore providing the loans are provided to generally support the company and are not provided to fund a specific R&D project then there will be no impact on the R&D claim. We very much doubt that there will be any clients or claimant companies receiving funding for a specific R&D project under the CBILS scheme and therefore not something we envisage becoming an issue for any companies R&D claim. We will continue to monitor the situation and as we are members of the Research and Development Consultative Committee (RDCC) we will be able to feedback to HMRC through that channel.
At present we are awaiting confirmation of how Recovery Loan scheme will be treated under state aid rules, and what this could mean for R&D tax relief claims. We will seek further information and advice as soon as it is available.
Businesses and Accountants will be spinning many plates in the coming months so making sure you have other advisors around to lighten the load is crucial.
HMRC will continue to pay out tax credits even if you have delayed payments to HMRC due to Covid-19. Now is the time to be proactive and get ahead by starting the claim processes as soon as you can. We will make this processes as smooth as possible and will minimise the time you need to spend on this – leave it to us and you can focus on steering the ship.
R&D activity helps to protect jobs across the company. 80% of R&D tax claims are made up of people’s time so if you have resources that cannot be utilised in the normal way, think about if they can be deployed into development roles to help when the tide eventually turns. A percentage of these costs will be able to be reclaimed through R&D tax relief.
Should any companies need the cash sooner, there are R&D tax short term loan options available. We work with Rocking Horse Group and can facilitate the introduction should this be an option you wish to explore.
In the face of adversity, the entrepreneurial British spirit cannot be kept quiet and innovation shines through. From cutting edge medical research to find a vaccine, through to changing production lines to deliver what Britain needs right now.
This pandemic is moving at an unprecedented rate but we will stay ahead and beat it thanks to common sense and innovation and it’s our privilege to champion and take pride in the work of our fellow UK businesses.
Now is the time to do as much as possible for each other and as a SME working with hundreds of companies across the UK we will do everything we can to support. We will get the R&D tax credits sorted and work around client priorities, we will change our payment terms to help others with cashflow issues, we will listen to our clients and adapt with them, our terms will flex with those that need it the most and we will survive together.
Our incredible team have moved to 100% remote working and have not slowed down for a second. We are ready to continue to deliver for our clients when we know that right now, doing what we do is more important to our clients than ever before.
We won’t be able to come and see our clients in this period but we will still use our experience and knowledge to capture as much qualifying activity as possible. Working remotely is not new to us and we have the experience and team to manage your claim regardless. If there is still more to get by coming to visit you, we will know that, and come back when we are allowed to find and recognise that value for you.