R&D Grants UK Explained

If you are working on an innovative project in your business, you should explore the possibility of R&D grant funding to help with the development.

Grant funding is available across a huge range of sectors, o don’t let thoughts of space exploration or racing cars limit your thinking. Much, much more may be eligible for an R&D grant to help you achieve success.

What are R&D grants?

R&D grants provide non-dilutive financial support towards  your specified research and development project, usually by national or regional government or from the EU through associated funding. You will typically need to be creating a new product, service or process. Innovation grants are something you apply for in advance, often having to meet a range of criteria in order to qualify.

In the UK, R&D grants typically range in value from between £25,000 and £2 million.

Who can apply for an R&D grant?

Generally speaking, R&D grants in the UK are available to businesses of all sizes, especially SMEs.   However, many grants may be specific to a specific technology sector,  industry or  geographic location.

Depending on the grant that you are applying for, there may be upper or lower limits on your turnover and number of employees in the current or previous accounting period, as well as on your corporate structure. Requirements vary by scheme so talk to us about your eligibility for the available grant funding opportunities.

What projects can R&D funding support?

Innovate UK, the UK’s national innovation funding agency, sponsored by the Department for Science & Technology (DSIT), provides funding in line with strategic priorities outlined in the Innovate UK Action Plan (2021-2025).  These are:

• Net Zero
• Health & Wellbeing
• Technology areas which includes:
  • Advanced Materials & Manufacturing
  • AI, Digital & Advanced Computing
  • Bioinformatics & Genomics
  • Engineering Biology
  • Electronics, Photonics & Quantum
  • Energy & Environment Technologies
  • Robotics & Smart Machines

DSIT’s Science and Technology Framework (2023) set out an ambition for the UK to be a science and technology super power, identifying 5 Critical Technologies for investment and support:

• Artificial Intelligence (AI) – machines that perform tasks normally performed by human intelligence, especially when the machines learn from data how to do those tasks.
• Engineering biology – the application of rigorous engineering principles to the design of biological systems.
• Future telecommunications – evolutions of the infrastructure for digitised data and communications.
• Semiconductors – a class of electronic materials with unique properties that sit at the heart of the devices and technology we use every day.
• Quantum technologies – devices and systems which rely on quantum mechanics, to provide capabilities that ‘classical’ machines cannot.

Defra’s Farming Innovation Programme, delivered in partnership with Innovate UK, funds projects that will benefit farmers, growers and foresters in England. Grant support is available for collaborative R&D to develop innovative agri-tech solutions for sustainable and resilient farming.

In December 2023, the UK and EU formalised Association status for the UK in Horizon Europe. Horizon Europe supersedes Horizon 2020 and is a €95.5 billion European funding programme for research and innovation.

How much support is available?

There are vast sums of funding available, but R&D grants are something you have to proactively seek out.

The EU’s Horizon Europe runs until 2027 and has a budget of €95.5 billion, albeit to be spent across the continent. The average Horizon grant is worth £450,000 to a UK business.

Back in 2022, the then Chancellor Rishi Sunak announced the largest ever research and development budget for the UK – £39.8 billion between 2022 and 2025, with a target of raising the UK’s R&D spending to 2.4% of GDP by 2027. Some of this was diverted to Horizon Europe so there is overlap. In 2024-25 (when this article was first published), £8.8 billion is allocated to UK Research and Innovation (UKRI) which awards UK innovation grants, including through Innovate  UK, which has a budget of c.£1bn for 2024-25.

Examples of previous R&D grants

With so many billions of pounds worth of R&D grants available you can imagine there is a rich record of previous R&D grant successes.

For example, one UKRI area of investment and support was: Robots for a safer world.

They provided £112 million to more than 200 organisations who were seeking to create a safer working world for humans by placing robots in extreme environments, or places dangerous for humans to access.

For feasibility studies, funding ranged from 70% for micro/small organisations to 50% for large ones; and for experimental development projects the rates were 45% for micro/small organisations and 25% for large ones.

Outputs of the innovation included robots which could cope in the freezing depths of the North Sea, the hostile vacuum of space and the heat of deep mining.

Case studies from Horizon R&D grants include a South Yorkshire tech firm which was awarded £3 million for its work with road safety, while a UK consortium won in excess of £17 million to develop tidal energy in Orkney.

Innovate UK awarded a grant to a firm developing a fleet of high-performance sailing crafts which use deep ocean wind that they convert into green hydrogen at sea and then supply around the globe. This grant was delivered through its Investor Partnership Programme.

How to find out if you are eligible for an R&D grant

There is a DIY approach to finding out if you are eligible for an R&D grant, researching the sources of grants, seeing what’s available. It can be time consuming and hit and miss if you do not know what you are looking for.

However, working strategically with an R&D funding advisor like us can not only save you much of the legwork, but also help you link your grant funding to other complementary forms of innovation funding such as R&D tax credits and Patent Box. To maximise the available funding opportunities. When you work with a specialist like Kene, you will benefit from our wide-ranging, cross-sector experience to when developing your R&D funding strategy.

Once a suitable R&D grant has been identified we can work with you to to develop your project proposal so that your R&D grant funding application has the best chance of success. A detailed assessment process will ensure that you’re aligned to the best possible competition for your project. Our dedicated and expert team will help you to maximise the available funding to ensure that you have the highest possible chance of success.

How to apply for an R&D grant

In order to apply for an Innovate UK  grant you’ll need to create an account on the Innovation Funding Service (IFS) portal, after which you’ll be assigned a unique project number for your application. If you’re applying for a collaborative grant, you’ll need to invite your project partners to IFS.

Once you’ve set yourself up in IFS you’ll be required to provide details in the following areas:

• Background project & administrative info (not scored);
• Describing the need/challenge that your project addresses;
• Elaborating on your approach & innovation and how it will address the identified need/challenge;
• Provide an overview of your resources and project delivery plan;
• An overview of your target market and your route to commercialise your product in your given market;
• Identify the risks inherent with your project/innovation;
• Evidence how/why funding your innovation would provide good value for money for the UK taxpayer;
• Provide a detailed project budget and requested funding amount, broken down by key budget headings (e.g. labour, materials, sub-contracting etc.);
• Provide a detailed estimation of the future impact of your project, if funded.

Sometimes a grant can be applied for and paid out within a few weeks , other times it may take a full year. It may differ slightly from grant to grant, but generally speaking a R&D grant UK application will be along these lines:

1. Research the R&D grants available to you and check your eligibility (use Kene’s R&D funding eligibility checker here )
2. Complete an expression of interest for the awarding body to assess your suitability. This is sometimes referred to as an outline proposal
3. If you are given the green light, enter your full application
4. The awarding body will review your application and make their decision to award funding
5. You will receive notification of their decision, and if successful a timeline of next steps to set up the project

To find out more about how we can help your grant application, book a free consultation to speak with one of our expert advisors.

R&D grants UK frequently asked questions

What does R&D stand for?

R&D stands for research and development. It is the innovation activity that a business or other organisation performs. Read about what R&D is in business terms here.

What is an R&D grant?

An R&D grant is an award of money, usually made by, or on behalf of, a government to support a business or other organisation in its research and development activities. It does not need to be repaid, as long as terms and conditions of the grant have been met.

Can an adviser help me with R&D grants

Yes, a professional adviser can help you plan and apply for R&D grants. While you can do this yourself, a good adviser can help you optimise your position to give you the best chance of success,   their cross-sector experience, as well as take the legwork out of identifying grants. Book your free consultation with us here.

How long does it take to get an R&D grant?

The length of time it takes to get an R&D grant varies depending on who is awarding the grant. Typically, it may take a few months to up to a year.

How much is an R&D grant in the UK worth?

R&D grants in the UK vary in value depending on what they are for. Innovate UK offers grants ranging from £25,000 to £2 million, while the average value of an EU Horizon grant to a UK company is £450,000.

What types of businesses are eligible for R&D grants in the UK?

Any business can apply for R&D grants in the UK, but eligibility criteria may vary depending on the specific grant. Some grants target specific industries, sizes of businesses, or geographic locations.

Are R&D grants only available for technological projects?

No, R&D grants are not limited to technological projects. While many grants focus on innovation, they can also cover improvements in processes, services, or products in non-tech industries.

Can startups apply for R&D grants?

Yes, many R&D grants are available to startups. However, the eligibility criteria for each grant should be checked to ensure your business qualifies.

What is the difference between an R&D grant and R&D tax credits?

An R&D grant is a direct funding injection for a specific project, while R&D tax credits are a form of tax relief that reimburses some of the costs associated with research and development after the expenses have been incurred.

How often can I apply for R&D grants?

This depends on the specific grant scheme. Some allow for multiple applications over time, while others may have limits on how frequently a company can apply.

Can I apply for more than one R&D grant at the same time?

Yes, you can apply for multiple grants. However, some grants may have conditions that restrict overlap with other funding sources, so it’s important to check the guidelines of each scheme.

What are the main criteria that funders look at in an R&D grant application?

Funders generally look at the innovation level, potential market impact, value for money to the UK taxpayer. the feasibility of the project, and the capability of the business to deliver the intended results.

Are R&D grants taxable?

Generally, R&D grants are considered taxable income. However, there may be tax reliefs or offsets available depending on the nature of the funding, such as R&D tax credits and Patent Box.

Do I need to repay R&D grants?

R&D grants are typically non-repayable, meaning they are awarded as funding without the obligation to return the money, provided the terms and conditions of the grant are met.

What happens if my project is unsuccessful after receiving an R&D grant?

In most cases, you won’t be required to repay the grant if your project fails, as grants are awarded with the understanding that R&D inherently involves risk. However, you should ensure compliance with the grant terms.

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