We have received a number of enquiries from our members about how Biomedical Catalyst funding might affect a company’s R&D tax credits position.

Colin Hailey, of Confluence Tax and a member of the BIA’s Finance and Tax Advisory Committee, says:

It is necessary to consider the interaction between awards under the Biomedical Catalyst and R&D tax credits. Both systems are a form of State Aid or grant from the UK government, but it is not permitted for a company to claim State Aid twice in respect of the same expenditure.

The most valuable of the two is usually the Biomedical Catalyst award. Therefore this funding should be taken where possible, but crucially the award will specify the project in respect of which the award is given.

It is then standard practice to claim R&D tax credits in respect of all of the other R&D projects and activities of the company which are outside the Biomedical Catalyst award project. This approach, together with the amount of expenditure excluded from the R&D tax credit claim, should be clearly disclosed to HMRC when the claim is made.

For further information on Finance and Tax related issues, please see the BIA website.