There are a few technicalities that businesses should be aware of when they are taking advantage of any Coronavirus Business Support.
The Coronavirus Business Support was designed and deployed quickly without time to fully investigate every eventuality and we hope that the points raised will be ironed out in due course.
Are you involved in R&D?
If you are a business that claims R&D tax credits under the SME fund, and you are claiming State Aid under Coronavirus Business Support, this could affect your next claim!
Both the Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Scheme are considered to be State Aid.
If you received the Small Business Grants Fund, this is generally under the de minimis for State Aid. However, if you receive total de minimis aid exceeding the threshold (€200,000 over three years), then this will be classed as State Aid.
The Retail, Hospitality and Leisure Grant Fund is also considered to be State Aid!
If you have applied for funding under any of the above, you could be sacrificing your future SME R&D tax credit. You may still be able to make a claim under the large company RDEC scheme, but this is less advantaged.
Do you issue EMI share options to your employees?
To qualify for EMI share options, employees must work at least 25 hours per week for the company in which they hold share options.
When placing staff on furlough leave, one of the key requirements is that they perform no work for the company.
This may, therefore, cause those employees’ share options to be disqualified.
Have you arranged a Time To Pay arrangement?
HMRC have the power to withhold any repayments (such as R&D tax credits) to the extent that it allows them to recover unpaid tax liabilities.
If you use the “Time To Pay” helpline to delay tax payments and have an R&D tax credit due in the next few weeks, HMRC may reduce your payable tax credit by the amount of unpaid liabilities, even if you agreed a delay in payment!
Where HMRC have deferred VAT liabilities automatically under the end of the 2020/21 tax year, they have confirmed that the payments in these periods are not overdue and R&D claim payments will not be offset!
We are here to support your business, if you have any concerns please call us or email Mark or Andrew.
The content in this blog is correct as at 13/05/2020. See terms and conditions.