Grant funding

As we have covered, government grants and EU grants tend to be awarded to encourage innovation, and innovation is the context in which we are looking at grants here.

 

Innovation grants

UK government grants for research orientated companies are awarded by Innovate UK. These are distributed via competitions in which UK-based businesses pitch and winners are selected. UK innovation grants are awarded for the following types of projects:

 

Early feasibility studies;

Creation of new products, processes or services, or the improvement of existing ones; or,

Collaborative research with other businesses or institutions.

Grants can range between £25,000 and £10 million. These will often be technology grants but other types of development grant are given as long as innovation is taking place. In many circumstances, these will be considered state aid.

De minimis grants

There are some types of government grant which are not considered state aid as they are below a de minimis threshold: these are known as de minimis grants.

The EU themselves distribute innovation grants for business under their Horizon 2020 scheme – with a budget of €80 billion – and the older FP7 and FP6 schemes. As these are not sourced from member states they are not considered state aid, but will still affect an R&D tax credit claim.

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