The UK government has several ongoing schemes designed to encourage forward-thinking businesses to invest in Research & Development (R&D). These schemes apply to a huge range of businesses in any industry, including SMEs, larger businesses, and even multi-national corporations.
A major government incentive available to UK businesses is the R&D Tax Credit scheme, which enables SMEs to claim back around £25k for every £100k of qualifying R&D spend.
But what about companies whose ambitious R&D goals require funding in order to begin them? This is where Research & Development (R&D) grants come in to play.
What is an R&D grant?
R&D grants seek to enable and support investment in new and innovative products and processes that seek an advance in science and technology.
An R&D grant will often be offered by governmental bodies such as UK Research & Innovation (UKRI), but may also come from other organisations, such as local government.
What kind of projects may qualify for R&D grants?
There are a wide range of innovation grants available from both national and regional bodies, available to businesses and research organisations seeking to achieve goals such as the following:
- The development of new/improved products or systems
- Diversifying into new areas of opportunity
- Investing in new premises, or plant and machinery
- Creating new jobs
- Improving collaboration with other companies or organisations
How much are R&D grants worth?
An R&D grant will usually not provide the entire required funding for an R&D project but may cover a significant portion of total costs.
The amount of funding available through an R&D grant scheme will vary by the size of the applicant’s business, the nature of the project, and other factors. This criteria will be stated in advance for all applicants to review.
How do R&D grants work?
Organisations seeking funding for important innovative projects can seek R&D grants via a direct application process set up by the funding body, or through an intermediary.
Usually, the process will be set out by the funding body and will serve to ensure the funding is given to projects that are deemed sufficiently relevant and beneficial.
Innovate UK is a part of UKRI which deals with business-led innovation funding requests.
Once submitted, each R&D grant application will be assessed by an independent assessor with knowledge and expertise of the innovation area, such as software, engineering, or manufacturing.
How can you apply for an R&D grant?
To start the process for an R&D grant you can visit the relevant body website, such as UKRI or Innovate UK. They will have active listings of all available R&D grant funds, and include full instructions on how to apply, qualifying criteria, and what to expect from the process.
What is the difference between R&D grants and R&D tax credits?
R&D grants are a different kind of economic support to R&D tax reliefs and credits. R&D grants are provided for qualifying businesses by way of application in advance of a project and offer a lump sum to put towards the investment.
R&D tax credits, however, are different. They are another government-backed incentive which offers organisations an opportunity to claim back some of their R&D investment already undertaken by way of a cash credit or Corporation Tax reduction.
R&D tax credits are very generous, often worth around a quarter of the amount spent on qualifying R&D. They can also be claimed on innovative projects whether they are ultimately successful or not.
If your business is conducting R&D to improve products, processes or services, you can find out if you qualify for R&D tax credits using our free eligibility checklist.
