New support package for innovative businesses unveiled
Chancellor Rishi Sunak has confirmed a new £1.25 billion support package, designed to steer businesses that drive innovation and development through the coronavirus lockdown.
The two-stage financial package covers a new £500 million loan scheme for high-growth businesses, named the Future Fund. Meanwhile £750 million of targeted aid has been ringfenced for small businesses focused on research and development (R&D).
This targeted aid will be given in the form of grants and loans to underpin dynamic industries in the UK economy, such as life sciences and technology.
The funds are designed to not only protect these innovative small firms during the COVID-19 pandemic but back them financially. The scheme is designed to give these ground-breaking businesses the finance they need to develop more innovative products and solutions in these uncertain times and drive UK growth.
The national innovation agency, Innovate UK, will ramp up grants and loans payments worth up to £200 million to its existing Innovate UK customers that opt-in to the new scheme.
A further £550 million will be accessible to R&D intensive small firms, with financial support worth up to £175,000 per company made available to hundreds of businesses not in receipt of Innovate UK funding. The initial tranche of grants and loans will be released by mid-May.
Daren Moore, Group Commercial Director at TaxAssist Accountants, said: “These announcements provide an important boost for small businesses involved in technological development and innovation.
The recovery of our economy after the lockdown will certainly be supported by research and development activity and we welcome these new measures.
We will continue to raise awareness of the various sources of funding available to help support small businesses in these difficult times”
Innovative small firms are eligible for R&D tax relief too
Small firms that seek to achieve an advance in science or technology for their sector may also be eligible to claim R&D tax credits.
This is not just about innovation, claims can also be made for alterations and enhancements to existing products or processes.
SME R&D tax relief is currently 230% of all qualifying expenses meaning that for every £1 of qualifying expenditure your business makes, you can deduct £2.30 against your firm’s taxable profits. This enhanced deduction can reduce taxable profit and therefore liabilities, or in some cases result in losses that can be ‘cashed in’ for a refund.
To check your eligibility for SME R&D tax relief, call our friendly and experienced team today on 01245 245420 or drop us a line using our online enquiry form and we’ll do the legwork for you.
Last updated: 20th March 2024