Yes, the CBIL can affect your R&D tax claim.

Quick overview of this article:

  • What is the Coronavirus Business Interruption Loan Scheme?
  • What is the impact of CBILS on R&D tax claims?
  • Where are the rules?

 

What is the Coronavirus Business Interruption Loan Scheme (CBILS)? 

The CBILS provides government backed loans through British Business Bank to SME’s around the UK. The loans are up to £5 million, and whilst you remain fully liable for the debt, you do not have to pay interest for the first 12 months of the loan. 

What is the impact of CBILS on R&D tax claims? 

If you took out a CBIL and are wondering whether this will now affect your R&D tax claim, the answer is, it depends.  

If you have a CBIL and spend the money in an area of business that is not related to your R&D claim, then your R&D projects won’t be affected by this loan.

If, however, you have a CBIL and use it to fund your R&D Projects, then those very R&D projects part or fully funded by the CBIL money needs to be entirely claimed under the RDEC scheme. 

What are the rules? 

The CBIL is considered notified state aid which means the RDEC rules apply. 

RDEC rules are usually for large companies, however, in certain cases (like this one) SME’s are caught too. In short you can claim around 11p on every £1 of qualifying expenditure on R&D projects funded by the CBIL money. 

If you require any further information of how CBIL can impact your R&D claim, get in touch today.

Written By Shoayb Patel, Founder of RDvault

"My vision at RDVault is to become the world’s leading software company helping innovative companies effortlessly retain all of their R&D tax incentive claims."

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