Billion pound support package for innovative firms hit by coronavirus
UK businesses driving innovation and development will be helped through the coronavirus outbreak with a £1.25 billion government support package, the Chancellor announced recently.
Rishi Sunak said the targeted and tailored help would ensure firms in some of the most dynamic sectors of the UK economy – ranging from tech to life sciences – are protected through the crisis so they can continue to develop innovative new products and help power UK growth.
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Chancellor announces new £1.25 billion coronavirus package to protect firms driving innovation in UK
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SMEs focusing on Research and Development will benefit from £750 million of grants and loans
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Package includes a £500 million investment fund for high-growth companies impacted by the crisis, made up of funding from government and the private sector
The comprehensive package includes a new £500 million loan scheme for high-growth firms, called the Future Fund, and £750 million of targeted support for small and medium sized businesses focusing on research and development.
Chancellor of the Exchequer Rishi Sunak, said:
“Britain is a global leader when it comes to innovation. Our start-ups and businesses driving research and development are one of our great economic strengths, and will help power our growth out of the coronavirus crisis.
This new, world-leading fund will mean they can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity.”
The £750 million of targeted support for the most R&D intensive small and medium size firms will be available through Innovate UK’s grants and loan scheme.
This package builds on the government’s existing support for innovative, firms including internationally competitive R&D tax reliefs and the governments major commitments to increase public R&D spending to £22 billion by 2024-25.
R&D Qualification
What qualifies for R&D Tax Relief?
Projects in which the company are working to achieve a Scientific or Technological advancement in their industry. The company will have developed or modified a product, process or service, that is more beneficial than anything similar on the market.
Example activities that would be included in R&D claims:
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Experimental, theoretical or other work aimed at the discovery of new knowledge, or the advancement of existing knowledge
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Searching for applications for that knowledge
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Formulation and design of possible applications for such work
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Testing in search for, or evaluation of, product, service or process alternatives
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Design, construction and testing of pre-production prototypes and models and development batches
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Design of products, services, processes or systems involving new technology or sustainability improving those already produced or installed
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Construction and operation of pilot plants
Qualifying expenditure:
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Direct staff costs of people directly involved in the R&D activity
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Software and consumable items
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Qualifying expenditure on externally provided workers
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Subcontractors expenditure
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Water, fuel and power
Qualifying staff costs:
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Salaries, bonuses
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Employers NIC
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Employer pension contributions
Qualifying for R&D
To qualify, the company must be seeking a technological or scientific advantage within their industry. This does not have to be a successful project, nor does it have to be a completed project. If a company has a qualifying product, service or project, then they should take advantage of this. They may be able to reduce their next corporation tax bill OR even receive a tax refund.
Generation Financial Planning has partnered with R&D specialists to help research and support your business processes and activities. They have raised over £17m for SMEs through Research and Development tax relief, some of which has been through maximising claims which were started by other providers.
*Contact us on 0333 3208 626 or through our online form.
*(Our teams are still available and working, supporting businesses throughout the coronavirus pandemic)
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