The largest budget for R&D tax credits to date has been announced

Earlier this year it was confirmed that the largest-ever budget has been created for R&D tax credits with the government focusing on this investment to help cement the UK’s visibility as a leader in innovation. The budget set aside for R&D tax credits in 2022 – 2025 represents the largest-ever investment of this type made by the government and is even more of an incentive for businesses that have yet to tap into the R&D tax credits scheme.

What are R&D tax credits

They are part of a government scheme that is designed to reward organisations that are investing in innovation within their own business. Those enterprises that spend money on innovation are eligible for R&D tax relief and a R&D tax credit claim can be made to either receive a cash payment or a reduction in corporation tax. The opportunity to apply for R&D tax credits exists in every sector, it’s not just relevant to science or technology. The only criteria are that the business is a limited company spending money on qualifying R&D. Given the huge increase in the budget set aside for R&D tax, now is the ideal time for any organisation to look into how they could benefit.

The new budget is substantial

The budget set aside for R&D tax credits in 2022 – 2025 amounts to £39.8 billion, which is the biggest figure ever for R&D tax. The increase in spend is designed to help the government meet its target of increasing total R&D investment in the UK to 2.4% of total GDP by 2027. It will enable the UK to build on ambitions to become a science superpower and give the government what it needs to be able to prove it has delivered on its ambitious Innovation Strategy.

R&D spend is rising

The projections for R&D spend in the coming years show substantial increases in the UK’s world-leading research base over the next 3 years.  R&D spending is set to increase by £5 billion to £20 billion per annum by 2024-2025 – a 33% rise compared to the current parliament by 2024-2025. The idea is to help to achieve a strategic advantage in science and technology in the UK and leverage private investment to help create prosperity, especially in the wake of the pandemic.

What are the benefits for businesses?

R&D tax credits offer businesses that are investing in innovation the opportunity to access innovation funding that can be transformative. Claiming R&D tax credits is simple and the turnaround is quick, providing an accessible source of resources for organisations that are focused on growth in 2023, and beyond. Driving innovation, gaining a competitive edge and refining ideas and development can all benefit from this additional funding source.

R&D tax credits have received the biggest boost yet with a record budget that could help many more businesses focused on innovation to thrive and grow. SPRK Capital can help your business access your R&D funding quicker, without having to wait up to 15 months, giving you more R&D spend.

You can find out if you are eligible here. Alternatively, contact us and we will guide you through the process.