Covid 19 Recovery Loan Scheme – Impact for Northern Irish Companies

15 April 2021

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On 3 March 2021, the Chancellor of the Exchequer announced in his Budget that, from 6 April 2021, companies could apply for Government guaranteed loans through the Recovery Loan Scheme.

In most situations it is unlikely that the receipt of these loans should have any effect on subsequent claims for Research and Development (R&D) Relief. However, the Recovery Loan Scheme is a notified State Aid and so where a company’s R&D activities fall within the Northern Ireland Protocol and the loan was used to fund any element of those activities, a claim for SME R&D Relief cannot be made because the expenditure has been subsidised.

If you are unsure on what the potential impact of obtaining these loans could have on your R&D Tax Relief Claims, particularly if your company is subject to the Northern Ireland Protocol, please contact us.