Innovate UK

Any UK-registered company undertaking research and development activity on an innovative product, process, or service with the potential to disrupt a market could be eligible for InnovateUK grant funding.

There are many grant schemes available, and these change all the time, but typically if your project, but typically if your project runs for 6-36 months and will cost £100k to £1 million, there is likely to be a grant scheme for you.

Grant funding is a competitive process with applications evaluated by a panel of 3-5 experts across business, academia, and your industry sector. Applications are made online, and if successful, you can usually start your project three months after the application.

SMEs can request grants for up to 70% of their project costs. The grant is paid quarterly in arrears- i.e. you work on your project for three months, then submit a claim, and the funding body pays into your company bank account the agreed percentage of the project costs you spent during that quarter.

As long as you do the work you proposed in your application, grants are not repayable. Even if the project fails- as long as you undertake the work and submit your claims, you do not have to repay the grant.

Also, unlike equity, investment grants are not dilutive- you do not have to give away shares in return for the funding.

You can claim grant funding on the following categories of expenditure that you invest in your R&D project:

• Labour costs of your team members on PAYE, including employers’ National Insurance, pension contributions, and other contractual costs.
• Business overheads (typically a fixed 20% of your project labour costs).
• Materials- and materials, including energy costs, that are used on the project.
• Capital expenditure- the depreciation suffered during the project on any existing or new equipment. This can range from team members’ computers to manufacturing equipment for your project.
• Subcontracting- if you need external help to undertake your project, you can claim the costs of external companies. These should be UK based unless you are unable to access the necessary expertise or capabilities in the UK, and should ideally be less than about 40% of your overall project costs.
• Travel and Subsistence- if you or your team need to travel to undertake the project, the grant can be claimed on the costs incurred.
•  ‘Other’ – you can include costs for licensing-in technology, regulatory approvals, up to £7500 of IP costs, renting laboratory space, etc., necessary to undertake your project.

Your team should have the expertise and skills to undertake your project.

External assistance can be used and claimed if it is impractical or impossible for your company to perform some of the work yourself (you need the facilities, equipment, or niche expertise, for example).

You can include subcontracting in your budget, but most of the work (more than 50% should be undertaken in-house).

Your application, except for a short public description that you write yourself, is entirely confidential and will not be made public. The grant scheme administrative team and the panel of 3-5 independent evaluators are all under strict non-disclosure agreements, including non-compete clauses. In our 15 years in the industry, we have never heard of any leak of any element of any grant application.