How can businesses utilise R&D grants
When it comes to innovation, R&D grants can be a vital source of financial support and momentum. They are available to organisations in the UK where innovative new products, services or processes are being developed and are available from a range of different sources. If you’re looking to utilise R&D grants then here are some tips on how to do it.
Get clear on what R&D grants are for
This will usually be an innovative product, service or process that is being developed for commercial purposes. This is not necessarily reserved for big, breakthrough moments, as it could be used to fund a range of other changes. Grants are often used for something like a feasibility study, developing a prototype or enabling collaboration with other businesses, for example. Grants tend to be available for time-limited projects, as opposed to those that are simply ongoing and will typically provide a percentage of financial support – rather than funding for an entire project.
UK Research and Innovation grants
There are various funding options available from UK Research and Innovation and new funding competitions are announced all the time. This might include, for example, projects that are tackling one of the key challenges that have been identified in the government’s industrial strategy or those that are supporting government institutions with their own innovative ideas. Most government support for R&D funding is delivered as R&D tax relief, which can be either a payable credit or a percentage reduction in a company’s corporation tax bill.
R&D tax credits
Although these are not strictly speaking R&D grants, these tax credits are often used in the same way and can provide a similar level of financial support and opportunities for innovation and growth. Profitable companies are able to use R&D tax credits to reduce their end-of-year tax bill and there is also the option to receive a payable tax credit. These pseudo-R&D grants work on the basis of allowing businesses to claim the costs of eligible R&D activities where those activities are focused on innovation and advancing science and technology. For small businesses to claim R&D tax credits, the company must be trading as a limited company with fewer than 500 employees. There are also limits on turnover – below €100 million or total assets below €86 million. This can be claimed through the business’ corporation tax return and is based off 230% of eligible costs.
Other options for R&D grants
Most limited companies in the UK that are engaged in eligible activities will be able to claim R&D tax credits. However, there are also other R&D grants available, including regional grants in England, Scotland, Northern Ireland and Wales and the option of working with larger companies that may be interested in funding SME innovation. Professional and trade associations can also be a useful source of R&D grants, as well as incubators and business accelerators.
From tax credits to regional funding there are many ways for businesses to utilise R&D grants today. SPRK Capital is an innovative online provider of R&D Tax Credit Loans which can stretch your R&D grants further, simply find a partner and we can help you access your capital faster.
If you’d like to speak to an expert, then please contact us today.
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