Do European Grants impact SME R&D tax credit claims?

Yes, for SME claims only, these considerations are significant. 

If an SME receives State Aid for an R&D project, then every £1 of State Aid received means that none of the project costs can be included in an SME R&D claim. However, the project may still be claimed under RDEC if it meets the RDEC rules (except for mainly work subcontracted to other companies, which cannot be claimed under RDEC).

If a grant does not qualify as State Aid, for instance, if it is not awarded or administered by the state, such as an EU Horizon 2020 grant, or if it falls under De Minimis and the company has not exceeded the threshold where De Minimis grants are treated as state aid, then an SME can claim the grant-funded portion of the project under RDEC and the remaining portion under the SME scheme.

The award of a grant to a large company does not affect its eligibility to claim under RDEC.