A guide to help companies find the practical support to invest in research and development (R&D).
Company research and development (R&D) professionals and accountants will want to ensure that their businesses are making full use of the extensive range of government support available for businesses undertaking R&D and innovation. This support helps companies to develop the new products and services they need to remain competitive and grow.
Help through the tax system
R&D tax credits
This is the single biggest government scheme supporting business investment in R&D and innovation. Claims totaled £1.2 billion in the financial year 2011 to 2012. Don’t let your company miss out on claiming your share.
The small and medium-sized business relief is for companies with fewer than 500 full-time employees and is worth about 28p for every £1 spent. The large company scheme and the ‘Above the Line’ credit are both worth about 7p for every £1 spent.
R&D tax credits include enhanced relief from Corporation Tax on qualifying R&D expenditure, and in some cases payable credit. HMRC have specialist units that can advise companies on how to make a first claim. More information on R&D tax credits.
The Patent Box enables companies to apply for a lower rate of Corporation Tax on profits earned after 1 April 2013 on patented inventions and certain other innovations. This relief is being phased in from 1 April 2013. The lower rate of Corporation Tax will be 10%.
R&D grants, contracts, help from universities and support for networking
Currently there are 17 schemes, each of which addresses different aspects of the business R&D and innovation process.
These include both research grants and development grants to help individual small and medium-sized enterprises (SMEs) develop and exploit new ideas and to help businesses work together collaboratively with universities and higher education.
The Catapult Centres are a network of world-leading UK technology and innovation centres that help businesses transform ideas into products and services.
Under another initiative SMEs can be contracted for work that addresses specific research challenges identified by government departments.
There is also finance to assist a range of demonstration activity in low carbon energy generating technology.
There is support for knowledge transfer. This enables the placement of recently qualified university graduates in business. Other schemes support networking.
The full suite of schemes is delivered by Innovate UK, the national innovation agency - visit Innovate UK’s website.
Incorporating good design from the outset considerably adds value to a product. Find out about support available via the Design Council.
Protection of your intellectual property
Intellectual property resulting from R&D, including inventions, products and processes and designs can be a business’s most valuable asset. For advice about patents, trade marks, designs, copyrights and other options for protecting intellectual property contact the UK Intellectual Property Office (IPO).
European Investment Bank
Substantial lending is available to UK corporates for investment in R&D and innovation (but not expansion) from the European Investment Bank (EIB), an EU organisation.
Loans typically total about £150 million equivalent, to cover 50% of expenditure over a 3 to 4 year period. The minimum lending is generally about £40 million equivalent.
Find out more by contacting the Corporate and Banking Division, Lending Operations in Western Europe via the Information Desk at firstname.lastname@example.org (Telephone: 00352 43 79 – 22000) and speak to one of the business relationship managers.
Sources of advice
For further advice about the range of financial and other support available visit the Business finance and support pages.
See also the SME Finance Guide (November 2012) prepared by The Institute for Chartered Accountants for England and Wales (ICAEW) in partnership with government, which was published to help small businesses understand the different types of finance available to them.
Innovation Investment Policy
Department for Business, Energy and Industrial Strategy
Orchard 2, Floor 2
1 Victoria Street