What forms of innovation funding are available for large corporations?

The current landscape of innovation funding

If you’re a large company, “innovation funding” isn’t one thing, it’s a mix of:

• Entitlements you can claim if you meet the rules (mainly R&D tax relief and Patent Box), and;
• Competitive funding you have to win (grants, contracts, collaborations, and some sector-specific programmes)

The big shift since 2020: most businesses now operate under the merged R&D tax relief framework for accounting periods beginning on or after 1 April 2024, so “SME vs large” is no longer the starting point for R&D tax relief planning.  

And HMRC scrutiny has clearly tightened. HMRC’s latest published statistics (September 2025, covering tax year 2023–24) show 46,950 total claims, down 26% year-on-year, while the value of relief only dipped slightly (to £7.6bn) because average claim sizes rose.  

Below is an updated, genuinely practical guide to the funding routes that matter for large corporates right now, how they fit together, and what to watch out for.

If you’re already spending on R&D

Start with R&D tax relief (merged scheme). It’s the baseline incentive for ongoing programmes.  

If you’re commercialising patented products

Layer in Patent Box (often where the bigger long-term value sits once revenue is real).  

If you need partners, facilities, or external validation

Look at Innovate UK/UKRI competitions, Catapult collaborations, and Horizon Europe (now fully accessible again for UK applicants).  

If you're solving a public sector problem with an innovative solution

Explore Contracts for Innovation (formerly SBRI): paid development contracts tied to real public sector problems.

Tax incentives: the foundation for large-company innovation investment

For large corporations, the most dependable innovation support usually comes from tax-based incentives. They’re not “competitive pots”, and they’re designed to support sustained programmes, not just a single project that fits a funding call.

R&D tax relief (merged scheme)

For accounting periods beginning on or after 1 April 2024, most businesses fall under the merged R&D scheme. For large companies, the practical point is simple: this is now the default route, and it rewards organisations that can show disciplined project governance, credible technical evidence, and clean cost attribution.

Where the opportunity often is:

• Doing the basics exceptionally well: clear project boundaries, documented uncertainties, and a narrative that explains why the work wasn’t straightforward
• Capturing the “unseen” qualifying activity: large teams often have enabling work (test rigs, simulation, trials, systems integration) that is technically central but gets missed because it’s not branded as “R&D”

What to watch out for:

• Evidence built after the fact: you want contemporaneous records, not a heroic rewrite at year end
• Subcontracting and delivery models: big organisations often have complex supplier chains. Treatment can vary depending on responsibility and risk, so it needs careful handling
• Narratives that read like marketing: the best claims sound like engineering, science and delivery reality, not product brochures
  

Patent Box

If R&D tax relief supports the cost of creating innovation, Patent Box can support the profit from commercialising it. Both schemes compliment each other. For large corporates, Patent Box is where a longer-term, board-friendly story lands: invest in development, protect IP, then reduce tax on qualifying profits.

Where Patent Box can be especially valuable:

• You’ve got patented products or processes embedded in real revenue streams
• You’re scaling production, licensing IP, or launching multiple product variants, and you want to protect margin while expanding

What to watch out for:

• Leaving it too late: Patent Box works best when you think about it early enough to align IP ownership, licensing, and product revenue tracking
• Messy IP ownership across group structures: common in larger organisations, fixable, but it needs planning

Read more expert tips on claiming Patent Box.

‍Competitive funding: grants, collaborations and procurement (where the acceleration happens)

If tax incentives are the foundation, competitive funding is often the accelerator. In 2026 the landscape is actually pretty positive for large companies, not because funding is “easy”, but because there are more routes that support collaboration, supply chain innovation, net zero delivery, and real-world deployment.

The key is to treat this category as a portfolio:

• Grants for risky development and demonstrations
• Collaboration programmes for capability, facilities and partners
• Contracts/procurement for innovation with a buyer and a route to market

Innovate UK and UKRI competitions (the core grant engine)

Innovate UK remains the main UK platform for business-led innovation competitions. Large organisations often get the best results when they:

• Join or lead collaborative bids (especially where you can bring supply chain credibility, test sites, data, or a route to scale)
• Target calls aligned to strategic themes (net zero, advanced manufacturing, mobility, health, digitalisation of industry)
• Use competitions to fund specific milestones: prototype-to-demo, validation, scale trials, regulatory evidence, or manufacturing readiness

What large companies can do particularly well here:

• Provide the industrial anchor, the “this will be adopted at scale” credibility that many competitions want
• Bring facilities, operational environments, or customer access that make a project feel real rather than academic

What to watch out for:

• Underestimating delivery burden: bid writing is only the start; reporting, governance and milestone discipline matter
• Assuming you’re ineligible: some calls are SME-only, many are not so always read the scope properly

Sector and place-based funding (often where the best-fit opportunities sit)

Beyond national competitions, many opportunities sit in sector programmes and regional routes that are designed to build capability, supply chains and deployment.

This is particularly relevant if you operate in sectors like:

• Clean energy and the built environment
• Advanced manufacturing and engineering
• Health and life sciences
• Agri-tech and circular economy / waste innovation

Why it’s positive:

• These funds often value real economic impact (jobs, capability, supply chain resilience), which large companies can evidence
• You can sometimes combine them with internal investment and partnerships for bigger, faster programmes

What to watch out for:

• Different objectives: some place-based programmes care as much about local impact as they do about technical novelty, you need to frame the case accordingly

Catapults and Knowledge Transfer Partnerships (KTPs): capability and speed, not just cash

For large corporations, these routes are often less about “funding” and more about unlocking things you can’t (or shouldn’t) build internally for every project:

• Specialist equipment and facilities
• Independent validation and testing
• Access to researchers and deep expertise
• Structured innovation delivery with strong governance

Catapults can be a fast path to validation and scale-readiness. KTPs can be a strong fit when your challenge is building new capability inside the organisation: methods, modelling, data science, materials, process engineering, all delivered through a defined programme rather than ad hoc collaboration.

What to watch out for:

• Treating them like procurement: they’re partnerships, the best outcomes come from shared objectives and good internal sponsorship

Contracts for Innovation (public sector procurement): funded innovation with a buyer

If your innovation solves a public sector problem, procurement-led innovation can be an excellent route. It’s fundamentally different to a grant:

• You’re building against a defined need
• You’re paid under contract
• You’re closer to adoption and scale because there’s a buyer mindset baked in

Why it’s positive:

• Strong fit for organisations that want real-world deployment, not just R&D for its own sake
• Can open doors to broader public sector markets

What to watch out for:

• Commercial terms and IP: you need to understand what you’re committing to early

Horizon Europe (international collaboration at scale)

If you have strong partnerships or your innovation is genuinely at the frontier (deep tech, health, climate, manufacturing systems), Horizon Europe can be worth the effort. For large companies, the upside is access to bigger consortia, deeper science, and programmes designed for ambitious outcomes.

What to watch out for:

• Time and admin: it’s rarely quick but it’s worth it when the ambition is big enough

How to build a funding strategy that isn’t a scramble

The strongest large-company approach tends to look like this:

1. Run R&D tax relief as your baseline (process, governance, evidence, cost capture)
2. Use Patent Box as the commercial layer where patented IP is linked to real profit streams
3. Deploy grants and collaborations to accelerate milestones, especially demos, validation, manufacturing readiness, and supply chain innovation
4. Use procurement routes for adoption and market pull, particularly in public sector-adjacent markets

This is a positive landscape if you treat it like a system. The organisations that win aren’t necessarily the most “innovative on paper” they’re the ones who can explain what they’re doing clearly, evidence it properly and deliver to plan.