The Government recently announced that they would be allocating £39.8 billion towards a Research and Development budget over three years. This offers a massive boost towards the UK’s science, technology and innovation divisions, and the opportunity for businesses in these sectors to up their game.
Said to be the largest ever investment from the Government, the budget will be divided across the Department for Business, Energy and Industrial Strategy’s partner organisations, delivering its Innovation Strategy nationwide. In addition, funding will be available for EU programmes worth £6.8 billion, allocated to support the UK’s association with Horizon Europe, Euratom Research & Training, and Fusion for Energy. Other sectors including space exploration will benefit with a budget of more than £600 million available by 2025. UK Research & Innovation will receive £25 billion over the next three years.
For UK businesses operating within science and technology areas, this offers huge support in infrastructure and innovation. If you are looking to research and develop a process, product or service, test your innovation ideas or collaborate with other organisations, now is the time to apply for innovation funding.
R&D Tax Credits could help your cash flow
All businesses can also claim Corporation Tax relief on R&D projects within science and technology. However, don’t think you need to be a business with a research lab and white coats to take advantage! If you are making innovations in your field, be that IT, manufacturing or food and drink, there might be an opportunity. Get in touch with us and we can talk to you to identify any opportunities to make a claim.
R&D claims can be very valuable. For a profit making business there is a potential 130% additional deduction from your profits.
Example 1. Profit making company with £100k profit and £20k R&D spend.
In this case your R&D expenditure would allow an additional £26k to be deducted from your profits (£20k X 130%) this is a £4,940 saving on your tax bill.
Example 2. A loss making company with £50k loss and £50k R&D spend.
The business could claim an R&D tax credit of 14.5% of the loss to get paid to them and increase cashflow. The amount would be £16,675 paid into your bank account by HMRC! This is calculated as £50k X 230% X 14.5%.
If you want to see if your business could benefit from R&D tax credits, get in touch with us.