The UK government encourages businesses in technological innovation and research and development (R&D) projects.
If you plan to research and develop new products or services, you can get free information and advice and may also be eligible to apply for financial support – an R&D grant – or for R&D tax credits. There are also several other government initiatives to support you. The European Union also provides grants for some types of research.
Applying for an R&D grant usually involves completing application forms and demonstrating how you satisfy the funding conditions and requirements. An effective application is essential if you are to maximise your chances of obtaining a grant. Any guidelines given with the application should be closely followed.
This guide highlights some of the grants and other support available to businesses to help them undertake R&D and innovation.
Please note that grant applications can be complex and time consuming and there is a lot of competitions for schemes. Please bear in mind that, while you may fulfil the eligibility criteria, your application may not be successful.
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Government funding and other support
Most grants for research and development (R&D) have eligibility criteria covering the types of business which can apply and what the money can be used for.
For information on support in England, download the Solutions for Business Government Funded Business Support: A Guide for Business from the Department for Business, Innovation and Skills website (PDF, 118K) – Opens in a new window. Some Solutions for Business products are only available in England and not all of the products are available in all regions, depending on local priorities.
Government support for businesses is different in Scotland, Wales and Northern Ireland.
The Technology Strategy Board’s Smart programme (previously known as the Grant for Research and Development) provides grants to help small and medium-sized businesses (SMEs) in the UK who are working in any sector. The scheme is focused on supporting R&D projects that are likely to offer the largest returns. Scotland, Wales and Northern Ireland run similar schemes. See the page in this guide on the Smart programme.
Grants are also available for collaborative R&D programmes in science and technology. See the page in this guide on collaborative research and development.
The Small Business Research Initiative (SBRI) enables UK businesses to bid for public sector contracts to develop innovative technology products and services. See the page on the Small Business Research Initiative in our guide on Support networks and facilities for innovation and R&D.
The Department of Health (DH) commissions R&D programmes that are considered vital to improvements in medicine and health. Find out about support for public health, health services and social care R&D on the DH website – Opens in a new window.
Your business could also be eligible for finance from an Enterprise Capital Fund. These are composed of public and private money and provide equity finance to SMEs. However, these are temporary funds and subject to specific application deadlines. Find out about Enterprise Capital Funds on the Department for Business, Innovation & Skills (BIS) website – Opens in a new window.
R&D tax credits
R&D tax credits provide tax relief for research and development which aims to achieve a scientific or technological advance. For more information, see the page on this guide on R&D tax credits.
European R&D Grants
The European Union (EU)-funded Framework Programme is a European Commission initiative that aims to:
- strengthen scientific and technological structures within industry
- encourage international competitiveness, while promoting research that supports other EU policies
Promotion and support for UK organisations looking to participate in a collaborative R&D project with a European partner in the specific areas supported is co-ordinated by BIS.
See the page in this guide on the EU Framework Programme.
EUREKA is a pan-European network that aims to encourage Europe-wide collaboration in the development of new and innovative advanced technology products, processes and services. In the UK funding may be available through UK government R&D grants. See the page in this guide on EUREKA.
The Smart programme
If you operate a small to medium-sized enterprise in any sector in the UK, you could apply for funding from the Technology Strategy Board’s Smart programme (previously known as the Grant for Research and Development).
In order to qualify, the research and development (R&D) project you want to fund must be in the area of science, technology or engineering, and you must be able to show that the project is likely to produce significant returns. Funding is only open to single companies.
You can apply for one of three types of grant:
- Proof of Market – funding market research and testing, competitor analysis, intellectual property issues and planning costs associated with taking the product or service to market. A grant of up to £25,000 is available as long as this accounts for no more than 60 per cent of the total project cost. The project must last no longer than nine months.
- Proof of Concept – funding feasibility studies, prototyping, testing, protection of intellectual property and analysis of likely production techniques. A grant of up to £100,000 is available as long as this accounts for no more than 60 per cent of the total project cost. The project must last no longer than 18 months.
- Development of Prototype – funding demonstration models, protection of intellectual property, any trials or testing (including market testing) required. A grant of up to £250,000 is available as long as this accounts for no more than 35 per cent of the total project cost for medium-sized businesses, and no more than 45 per cent for small businesses. The project must last no longer than two years.
Research and development (R&D) grants in Scotland, Wales and Northern Ireland
Businesses in Scotland can find out about R&D and innovation grants on the Scottish Business Grants website – Opens in a new window.
Businesses in Wales can find information about funding for R&D on the Welsh Government website – Opens in a new window.
Businesses in Northern Ireland can find information about grants for R&D on the Invest Northern Ireland website – Opens in a new window.
Collaborative research and development
Collaborative Research and Development (R&D) funding provides grants to help develop the knowledge for new products and services, while cutting the cost burden associated with bringing research to market. These grants are delivered by the Technology Strategy Board and are available throughout the UK.
Competitions for funding are run in specific technology focus areas. Eligible projects must involve two or more collaborators, at least one of which is from a business. If your application is successful, you can expect to receive a grant of between 25 per cent and 75 per cent of your total R&D costs. Projects can range from short feasibility studies to longer term in depth R&D.
The Technology Strategy Board provides investment to encourage innovation in science, engineering and technology. It aims to help with the cost burden and share the risk involved when businesses bring new ideas and technologies to market. It also aims to cultivate communities of interest around major up-and-coming technologies.
The Technology Strategy Board has identified specific focus areas which include high value manufacturing, advanced materials, biosciences, electronics, photonics and electrical systems, information and communication technology, and nanotechnology, medicines and healthcare, energy generation and supply, transport, environmental sustainability, the built environment, creative industries and high-value services.
You can find out about the provision for collaborative R&D on the Technology Strategy Board website – Opens in a new window. Also, see the page on research and development competitions in our guide on the Technology Strategy Board.
In Northern Ireland, Invest Northern Ireland offers grants and venture capital support for R&D as well as offering a Design Advice Service, Innovation Vouchers, Support for Knowledge Transfer and Technology Collaboration.
Scottish Enterprise provides a wide range of support for R&D in Scotland including R&D Grants and SMART: SCOTLAND Grants.
Find out about grants on the Scottish Business Grants website – Opens in a new window.
Businesses in Wales can find information about funding for R&D on the Welsh Government website – Opens in a new window.
Other sources of funding
Further sources of funding are available for innovation. For an overview about government funding, download the Solutions for Business Government Funded Business Support: A Guide for Business from the Department for Business, Innovation and Skills (PDF, 118 K) – Opens in a new window.
The Carbon Trust can offer grants for research and development into low-carbon innovation. You can register for its Entrepreneurs’ Fast Track scheme – which replaces the previous Applied Research Grants and Business Incubation schemes. You can find out about the Entrepreneurs Fast Track scheme on the Carbon Trust website – Opens in a new window.
The National Endowment for Science, Technology and the Arts (NESTA) supports projects for innovative products, services or techniques. Support is provided through a variety of grants or career assistance.
Find out about supported programmes on the NESTA website – Opens in a new window.
The Knowledge Transfer Partnerships (KTPs) programme is delivered by the Technology Strategy Board. To read more information about KTPs see our guide on how to work with UK universities and colleges.
Knowledge Transfer Networks (KTNs), which are also managed by the Technology Strategy Board, provide information on funding, developing ideas and other innovation issues and cover a wide range of technology areas and business sectors. Find out about KTNs on the Technology Strategy Board website – Opens in a new window.
You may also wish to consider approaching a business angel. These are individuals or groups of individuals who are willing to invest their own capital into private businesses, in exchange for a minority equity stake. They usually look for businesses that show strong growth potential. For more information, see our guide on equity finance.
If you are developing a social enterprise, you may also be eligible for funding. See our guide: thinking about starting a social enterprise?
R&D tax credits
Research & Development (R&D) tax credits are primarily a tax relief for R&D that aims to achieve a scientific or technological advance.
Both small and medium-sized enterprises (SMEs) and larger companies can claim under the scheme. You can find more information on this scheme in our guide on Research and Development (R&D) Relief for Corporation Tax.
HM Revenue & Customs (HMRC) has specialist R&D units responsible for handling claims according to the postcode area. You can find out which R&D specialist unit to contact on the HMRC website – Opens in a new window.
Find the contact details for the specialist R&D units on the HMRC website – Opens in a new window.
The EU Framework Programme
The Framework Programme for Research and Technological Development is the European Union’s (EU) main instrument for supporting and encouraging collaborative and transnational research, development and innovation in science, engineering and technology.
The Seventh Framework Programme (FP7)
FP7 is the current Framework Programme and covers the period from 2007 to 2013.
FP7 consists of four specific programmes:
1. Co-operation – the largest component of FP7, this funds research activities involving transnational co-operation in ten thematic priority areas:
- health
- food, agriculture, fisheries and biotechnology
- information and communication technologies
- nanosciences, nanotechnologies, materials and new production technologies
- energy
- environment (including climate change)
- transport (including aeronautics)
- socio-economic sciences and the humanities
- space
- security
2. Ideas – funding for ‘investigator-driven’ research projects across all fields,carried out by individual teams in European competition and delivered by the European Research Council.
3. People – so-called ‘Marie Curie actions’ and other training initiatives aimed at the mobility of researchers. The budget is greater than previous framework programmes and more emphasis is given to industry-academic transfers.
4. Capacities – the Capacities programme aims to enhance research and innovation capacities throughout Europe in the following areas:
- support to new and existing research infrastructures
- research for the benefit of small and medium-sized enterprises
- regions of knowledge and support for regional research-driven clusters
- research potential
- science in society
- support to the coherent development of research policies
- international co-operation with third countries
Applying to FP7
The European Commission will invite bids through calls for proposals in each area. The calls, typically one or two each year, specify the areas of research to be supported. They usually give at least three months’ notice of the deadline for submission of a proposal.
The Commission has produced a guide to EU funding opportunities for research and innovation, to help business find the right option among the available EU programmes. Read a guide to relevant funding sources on the Community Research and Development Information Service (CORDIS) website – Opens in a new window.
Proposals need to be of a very high standard to be considered and must meet the objectives and time-scales of the relevant work programme.
Scotland has an integrated support service for Scottish Enterprise companies and strategic projects to maximise access to EU R&D funding. For more information on FP7 funding, contact Enterprise Europe Scotland by email at info@enterprise-europe-scotland.com.
Within the UK, the Technology Strategy Board provides support for businesses participating in FP7 and other EU research and development activities. For information on how the Technology Strategy Board can help you access support from these European programmes, see the page on international innovation programmes in our guide on the Technology Strategy Board.
There is also a comprehensive FP7UK web resource, which provides links to sources of more detailed information and helplines. You can access information on FP7 on the Technology Strategy Board connect website – Opens in a new window. Alternatively you can contact the TSB by email at FP7UK@innovateuk.org.
You can also find information about FP7 on the CORDIS website – Opens in a new window.
EUREKA
EUREKA is a pan-European network for encouraging market-oriented, transnational, collaborative research and development (R&D) projects, which lead to the development of innovative products, processes or services.
Projects can be in any technological area and there are no restrictions on project size, timing or length. The network involves organisations from 38 European countries and the Commission of the European Union (EU).
EUREKA is not a funding mechanism in itself and there is no central EU budget for supporting EUREKA projects. In common with most other member countries, the UK may sometimes provide funding support to project participants, up to a maximum of 50 per cent of the total project cost. However, many projects go ahead unfunded.
One of the main strengths of EUREKA is its networking mechanism. You may have a project idea but need partners to take the project forward. EUREKA offers a simple and easy-to-access partner-search facility. You can find information on research projects or partners on the EUREKA website – Opens in a new window.
You can also propose a research and development project idea on the EUREKA website – Opens in a new window. Your project idea can then be advertised on the website and circulated around the EUREKA network.
EUREKA is a potential partner programme for the Smart programme (formerly the Grant for Research and Development). For example, you can use EUREKA to form collaborations and Smart to fund the UK element of the project. See the page in this guide on the the Smart programme.
Download guidance on applying to EUREKA from the EUREKA website (PDF, 194K) – Opens in a new window.
UK companies seeking a larger grant than is available from Smart may consider applying to one of the Technology Strategy Board’s Collaborative R&D competitions to fund their participation in a EUREKA project.
Eurostars
Eurostars is a joint programme between the Eureka network, the European Commission and EU member states. It provides grant funding to near-market R&D projects led by research-intensive small and medium-sized enterprises (SMEs).
For information on how the Technology Strategy Board can help you access support from these European programmes, see the page on international innovation programmes in our guide on the Technology Strategy Board.
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