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Contact usExplore how Budget 2024 boosts innovative UK businesses with new funding, tax incentives, and support for growth. Find out which sectors will benefit most.
Rachel Reeves, Chancellor of the Exchequer, delivered her first Budget on 30th October 2024 and it’s good news for R&D and innovation.
With the £40bn tax increase taking the spotlight when it comes to Labour’s first Budget since being in government, some of the more low-key measures may get missed. We’ve covered what you need to know about R&D and innovation measures below.
The main takeaway from Budget 2024 for companies investing in R&D is that the existing R&D funding will be protected and even enhanced in the coming years.
The government will provide sustainable Corporation Tax incentives that allow companies to reliably predict their tax position. This includes:
Similarly, creative industry tax reliefs remain unchanged (following their own overhaul in recent months); this will provide £15 billion of support over the next 5 years.
The government will consult on the tax treatment of pre-development costs.
The increased employer National Insurance Contributions (NIC) may not be widely celebrated by employers; however, these costs can still be claimed in R&D tax claims, therefore the scheme remains a valuable resource for innovative companies.
Innovation in life sciences, green tech and data are at the forefront of the government’s emphasis on investment. The Chancellor has announced a £20.4 billion investment in UK R&D to promote economic growth, including full funding for the Horizon Europe funding programme.
The Budget also announced at least £25 million in 2025-26 to launch a new multi-year R&D Missions Programme, using private and third sector investment to accelerate delivery. The importance of commercialisation extends to the 5-year investment of £40 million for university spin-outs and proof-of-concept trials.
The disruptive Horizon Europe grant funding programme, long marred by challenges securing funding for British companies, will continue to be supported by the government. With £2.7 billion to continue the association with the EU research programme, UK companies can continue to participate in the scheme which funds and develops ground-breaking R&D projects.
Budget 2024 announced specific measures taken to build and support the UK’s life sciences sector. Over £2 billion was pledged to build and support the R&D in the UK’s life sciences sector. An uplift of funding for the National Institute of Health and Care Research and £70 million in funding for the Life Sciences Innovative Manufacturing Fund for 2025-26 were announced. This is intended to build the UK’s resilience and preparedness for health crises.
In line with infrastructure boosts, the government is aiming to emphasise delivering innovation in high-potential areas like Glasgow, Manchester and the West Midlands. The government will invest at least £500 million over the next year in Project Gigabit and the Shared Rural Network, accelerating the rollout of digital infrastructure to underserved regions in the UK.
Alongside this local investment, up to £37 million was allocated to the Made Smarter Innovation programme for the digitalisation of the manufacturing sector. The aerospace industry will also receive its own boost with a commitment of £975 million over five years. In parallel, the automotive industry will receive £2 billion over five years, with a special focus on building zero-emissions vehicles.
Outside of the short-term tax and funding commitments, Budget 2024 also promised stability for innovation funding. This will be delivered through 10-year budgets, designed to build productive industry partnerships and more certainty for R&D companies. This will be outlined in phase 2 of the Spending Review.
Other plans proposed are to build investment in R&D through encouraging pension funds to invest in UK growth assets and the Artificial Intelligence Opportunities Action Plan and National Data Library. The latter two will build on the UK’s data and AI capabilities, leveraging public resources and building on public service delivery.
Ultimately, government R&D spending will reach £20.4bn in 2025-26, which can only be good news for highly innovative companies looking for a boost in funding. But even the less transformative funding options, like R&D tax credits, are staying consistent, meaning companies can plan their R&D more effectively for the coming years.
Recent changes announced by the last government, or those minor adjustments made by the current government, may have you feeling a little nervous about making an accurate claim, especially with HMRC scrutiny at an all-time high. Myriad has over 20 years of experience making R&D tax claims for SMEs and large multinationals, and our team is happy to run through any concerns.
When you make an R&D tax claim with Myriad, there’s no risk to you. We will only submit robust, accurate claims; if HMRC queries your claim, we will defend it at no extra cost. Should HMRC eventually reject your claim, we won't charge you any fees, cover any HMRC penalties, and even compensate you for your time.
Myriad’s best-in-class grant funding team will assess your projects for suitability for R&D and innovation funds, from UK-led programmes, like the Smart Grant, to the £80 billion Horizon Europe programme.
If you want to make a strong, defensible R&D tax claim, or give your application to innovation funding opportunities the best chance, get in touch with the experts at Myriad.
The new Additional Information Form (AIF) is required for Creative Tax Relief claims from April 2024. Ensure compliance and secure your tax credits with this guide.
Rules for R&D tax relief for subcontracted projects is evolving in the UK. Learn about SME, RDEC, and the new Merged Scheme effective April 2024.
Learn about the UK’s new Audio-Visual Expenditure Credit (AVEC) for film & TV, simplifying tax reliefs for creative sectors. Discover who qualifies, what productions are eligible, and how to claim this simplified credit, available for productions from 2024.
Please contact us to discuss how working with Myriad can maximise and secure R&D funding opportunities for your business.
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