Access to research and development (R&D) funding and attracting the best people to the UK are two of the major concerns facing the science and technology sectors post-Brexit and post-Pandemic. These issues must be addressed if the UK is to stay ahead of the game in global innovation.
A UK funding roadmap
The Government sought to reassure hi-tech businesses and research organisations with its Research and Development Roadmap, published in July 2020. The Roadmap set out details of increased post-Brexit funding from sources such as Innovate UK and relevant research councils.
Government investment in R&D will rise to 2.4% of GDP by 2027 and public spending on UK and international R&D projects will increase to £22 billion by 2024/25. This is good news for businesses and academic institutions that rely heavily on UK and EU funding.
The EU Horizon
The EU Horizon 2020 programme has been accessed by UK researchers for some years but as the name suggests, this has now ended. Successful applicants will have their funding underwritten by the UK Government for the lifetime of the project.
Horizon Europe replaced Horizon 2020 and will run until 2027. Under the terms of the EU-UK trade agreement, UK organisations can participate in the programme, but the UK has no influence over how Horizon Europe operates. A funding stream that is no longer available to UK applicants is the European Innovation Council’s Accelerator Fund.
What about R&D Tax Credits?
Innovation in R&D takes place in all business sectors, from automotive and aviation, through to manufacturing, electronics, food and energy. At CRM, we have helped many clients in various sectors to claim back money that they didn’t realise was available to them.
The tax credits are calculated on your research and development spend which is deducted from your taxable profits or added to your losses to give a Corporation Tax reduction (if in profit) or a cash credit (if loss-making) or a combination of both.
There is no assumption that the UK Government plans to make any changes to the R&D Tax Credits system post-Brexit. In fact, this tax relief supports the Government’s aims of incentivising investment and creating an attractive environment for innovation.
Innovation needs talented people
The UK’s science and technology sectors rely heavily on attracting and retaining the very best people from around the world. These sectors have concerns that they will have limited access to talented researchers and scientists under the UK’s tightening immigration rules.
There is acknowledgement of this fear in the Government’s R&D Roadmap, and a commitment to smooth the immigration path for the brightest talent to live and work in the UK. £300 million will be made available to upgrade scientific infrastructure such as lab and research facilities, equipment and resources to cement the UK’s position as one of the best places to work in innovation.
Overseas academic researchers and digital tech experts can apply for a Global Talent Visa allowing them to work for five years in the UK and renew this every five years, whilst overseas PhD students can stay for a further three years from Summer 2021.
It seems that there may be some additional challenges for research and development organisations accessing funding and talented individuals post-Brexit but these sectors have other opportunities to continue R&D projects and exploit additional funding from the UK Government.
If you need guidance through the R&D landscape, or a grant audit, or advice on R&D or Patent Box tax relief, speak to Alan Sowden, CRM’s specialist in the Tech sector and our Technical Director, on 01865 379272.