HMRC have published an Impact Assessment for Changes to R&D tax credits to ensure State aid compatibility.

Research and development (R&D) tax credits aim to encourage companies to spend more on R&D in order to promote investment in innovation. Changes are needed to the R&D tax credit scheme for companies that are small and medium sized enterprises and the vaccine research relief scheme.

At Budget 2007, the Government announced changes to the schemes, notably to increase the rate of the relief given, and, as a consequence, the changes to the schemes were necessary to ensure that the revised reliefs still fall within the European Commission's state aid guidelines.

For full information see http://www.hmrc.gov.uk/ria/rdtc-state-aid.pdf