The impact of the Coronavirus Job Retention Scheme on R&D

Many R&D heavy businesses will have made use of the Coronavirus Job Retention Scheme (CJRS) to protect the jobs of their employees.

We have been asked a few times how this will impact a company’s R&D claim. The good news is that the receipt of payments for furloughed employees is not classed as state aid, so does not impact the availability of the SME scheme for a company.

However, it stands to reason that if a staff member is furloughed then they cannot by definition be “working” on R&D.

On that basis, any salary paid to an employee during a furloughed period will not be eligible for the relief.

Companies will need to maintain detailed records of who has been furloughed and for what periods to ensure that they only claim the relevant proportion of a staff member’s working time. This may therefore mean that staff who would normally have a very high R&D proportion may be reduced to a much lower proportion for the year in which COVID-19 falls.

This should be taken into account and built into cash flow forecast early. We can help you assess the impact of this on your claim.

Other blogs in this R&D series

Episode 1 – Not all R&D is qualifying R&D
Episode 2 – Why use an accountant for your R&D claims?
Episode 4 – Consultation on data and cloud computing – qualifying expenditures for R&D tax credits

Contact us

For further advice, please contact Hollie Thompson at hollie.thompson@taitwalker.co.uk.