R&D Largest Budget Increase
Find out how the recent budget increase can affect your claim
Table of Contents
Rising R&D Funding
On 14th March the government announced a generous funding package for Research and Development. The allocation amounts to £39.8 billion divided between partner organisations over a three-year period.
This comprehensive funding allocation will be welcomed by organisations such as:
- UKRI (UK Research and Innovation), who will receive £25 billion alone
- Innovate UK, who play a ‘critical role in providing funding to innovative companies through the early stages of idea development, and to commercial success’. Innovate UK will see a 66% rise in funding for its core programmes in 2024/25, culminating a £1.1 billion increase
- ARIA (Advanced Research and Invention Agency), an organisation dedicated to achieving ‘transformational science and technology’ will have received £800 million by 2025/26
- Horizon Europe- BEIS has pledged to commit £6.8 billion to the international innovation programme founded by the EU, within which the UK will be involved as a guest participant
By comparison, the total yearly budget for R&D will reach £20 billion per annum by 2024/25, rising significantly by over £5 billion since 2021/22.
The government’s largest ever financial commitment to R&D reinforces their intentions for how they plan to navigate the UK economy post-pandemic. Their emphasis upon the importance of research and innovation in science and technology sends a clear message that this will be the axis for expanding the economy, achieving their pledge of Net Zero by 2050, and building upon our presence internationally, with aspiration for the UK to emerge as a “science superpower” and an “innovation nation”.
Strengthening our R&D system and the utilisation of R&D financial support will be central to unravelling this anticipated roadmap. A notable goal set out by the government is for R&D to comprise 2.4% of GDP by 2027, a figure that will emulate the R&D systems of many countries across Europe.
The focus upon UK innovation will no doubt prove to be beneficial to businesses engaging in research and development. The government’s Innovation Strategy, a defining document for the UK’s innovation policy, asserts that “To be a global hub for innovation means having companies of all sizes creating breakthrough new products, becoming more efficient, and scaling to full growth. All with an eye to the international market as well as domestic market.” Companies of all sizes are integral to the collective growth of our economy, and it is abundant that the extensive funding allocation from BEIS will be unreservedly available to any contributing business.
R&D Tax Credits
The innovation strategy presents us with updates on how the various avenues of R&D funding are changing and developing. In 2021 the Chancellor delivered a review upon the two available tax credit schemes, with an aim to “ensure that the reliefs are up-to-date, internationally competitive, and effectively targeted on activities that drive the best outcomes for the UK economy.” Tax incentives are a core avenue for R&D funding, and as government support rises across the entire R&D spectrum, the scope for attaining a successful and more complimentary claim for your R&D expenses may well increase with it.
With more government backing than ever before, and with a funding package that appears to cover all the bases, it’s an exciting time to be conducting R&D in the UK. If your company is undergoing R&D, and contributing to the nationwide innovation incentive, we believe now would be the perfect time to consider applying for subsidy. If you are thinking of applying for R&D Tax Credits, contact Counting King on 0161 667 5069, or email at email@example.com
Unsure as to whether you qualify? We’d be happy to assist you. Alternatively, take a look at our blog ‘How Do I Know I Qualify For R&D Tax Credits?’
R&D Tax Credits 2023 – Legislation Changes Find out how to keep miximising your claims Table of Contents R&D Tax Credits 2023 – Legislation Changes