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Despite the negative headlines around the £40bn increase in taxes with the burden falling on businesses, allied to low growth forecasts and higher interest rates, there are still reasons to be optimistic for ambitious business owners in the UK. Investment in innovation was mooted soon after the election so it was interesting to see things coming to fruition and encouragement for innovation has been a focus across a number of fronts. Firstly with R&D tax relief and full expensing being maintained and over £20bn allocated for government R&D spending in 2025/6. A further £3.5bn will be targeted at aerospace, life sciences and automotive sectors over 5 years. Also a new mission driven R&D programme worth £25m will also be introduced to target specific areas and further details on this will be released.
Also, the UK Shared Prosperity Fund (UKSPF) has been extended ahead of wider reforms in the future and the UKs commitment to Horizon has been fully funded to open up £80bn in research funding for UK organisations to apply for. So that’s encouraging news for innovation for the future, but right now significant volumes of grant funding are still available across the UK, nearly £4bn in fact. Of course they are tax free and indeed may utilise tax relief as an added bonus. They are free to the recipient so don’t attract interest charges and of course are designed to promote growth. Grant funding can mitigate increases in the minimum wage and employers’ NI contributions for businesses that are looking to innovate and grow.
No doubt there will be further detail announced through spending reviews in the coming months but how they are distributed and promoted will be important so that the funds get to the right businesses. Of course we will keep you updated and let you know how and when these funds become available. It will be an interesting period so keep an eye out for updates!
