FP7 and R&D tax credits in the UK
R&D tax credits can be claimed for work in projects funded by the Framework Programme Seven - for Research & Technological Development. FP7 is the EU's main instrument for funding research in Europe. It is also the world's largest and most generous R&D grant scheme.
What is more, "FP7 is NOT notified State aid"
This means that UK Small and Medium-Sized Enterprises (SMEs) can claim for their own qualifying R&D expenditure under the SME scheme and for qualifying R&D expenditure funded by the FP grant under the large company scheme. In the tabular example below the SME can claim tax relief totalling £350,000 against qualifying R&D expenditure of £250,000.
Example of what R&D tax credit a SME can claim in a FP-funded project:-
Qualifying R&D expenditure |
R&D Tax Credits |
|||
| Funds | Scheme | Rate of Relief |
Relief £k |
|
| Source | £k | |||
| FP7 Grant Company's own resources |
£100k £150k |
Large Company SME |
125% 150% |
£125k £225k |
| Total | £250k | £350k | ||
Large companies can claim under the large company scheme for all qualifying R&D expenditure projects including for the FP grant-funded element.
