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Choosing the right R&D scheme

Caroline Hunt, Director, Innovation Taxes Group
22/08/2019
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A company qualifies under the SME R&D scheme where it has:

Fewer than 500 employees, and either,

  Maximum annual turnover of €100 million   or Maximum balance sheet total of €86 million 

 

 

 


The size is broadly determined by aggregating the company's figures together with those of any fellow group companies and a proportion of the figures of those companies where it directly or indirectly has a shareholding of between 25% and 50%. Certain venture capital companies and financial institutions can be ignored for this purpose.

But the story does not end here. Even when you are an SME, based on the size limits, you may have to claim under the Large Company scheme where either of the following apply:

  • R&D is subcontracted to your company
  • Your company receives a subsidy or grant to help with the R&D

For companies that receive grant funding, or a subsidy, the R&D tax benefits will either be wholly under the Large Company scheme  (where this is notified state aid), or partly under the Large Company scheme and partly under the SME scheme.

Still not sure which R&D scheme applies to your company?

It can be quite complicated to determine which scheme applies to your company and it is easy to get it wrong. Use our easy guide to determine the R&D scheme that is right for your company. 

Decision tree

* The size limits for the total number of employees, turnover and balance sheet are broadly determined by aggregating the company’s figures together with those of any fellow group companies and a proportion of the figures of those companies where it directly or indirectly has a shareholding of between 25% and 50%. Certain venture capital companies and financial institutions can be ignored for this purpose.

Contact us

Caroline Hunt
Caroline Hunt
Director, Corporate Tax
London