Incentives and funding
An introduction to tax, innovation and equity investment incentives, and national and local support through funding programmes.
Tax and innovation incentives
Research and development tax relief
You can claim corporation tax relief if you are working on an innovative project in science and technology that meets the UK government’s definition of research and development (R&D).
There are 2 main types of R&D tax reliefs:
- small and Medium Enterprise (SME) R&D relief, for companies with less than 500 staff
- research and development (R&D) expenditure credit, for larger companies
Get guidance on R&D tax relief on GOV.UK
Patent Box
The Patent Box is designed to encourage companies to keep and commercialise intellectual property in the UK.
It offers a reduced rate of corporation tax of 10% on profits earned from patented inventions and some other types of intellectual property.
Get guidance on the Patent Box on GOV.UK.
Find more information on grants and funding specifically for research and innovation in our guide to research and collaboration support.
Equity investment incentives
Seed Enterprise Investment Scheme (SEIS)
Designed for new companies, SEIS can help your company raise money by offering tax reliefs to individual investors who buy new shares in your company.
You can receive a maximum of £150,000 through SEIS investments.
There are various rules you must follow to ensure your investors can claim and keep the related SEIS tax reliefs.
Check if you qualify for SEIS on GOV.UK.
Enterprise Investment Scheme (EIS)
Designed for established companies, EIS can help you raise money by offering tax reliefs to individual investors who buy new shares in your company.
Under EIS, you can raise up to £5 million each year, and a maximum of £12 million in your company’s lifetime.
Find out more about the EIS on GOV.UK.
Venture Capital Trust (VCT)
A VCT is a company that has been approved by the UK’s tax agency, His Majesty’s Revenue and Customs (HMRC) and invests in, or lends money to, unlisted companies. A VCT may invest in your company if it has:
- no more than £15 million in gross assets
- less than 250 employees
- not been more than 7 years since its first commercial sale
There may be higher limits if your company carries out research, development or innovation and can be classed as "knowledge intensive".
Find out more about VCTs on GOV.UK.
Check funding information for knowledge intensive companies on GOV.UK.
National support and funding
UK Research and Innovation (UKRI)
UKRI is the UK’s national funding agency for investment in science and research in the UK. It offers funding through the UK’s 7 Research Councils and Innovate UK.
Knowledge Transfer Network
Innovate UK ‘s Knowledge Transfer Network (KTN) has wide and deep sector expertise, and can connect you to people and organisations who can provide tailored funding, connections and support services.
Find out more on the Innovate UK KTN website.
British Business Bank
The British Business Bank is a state-owned economic development bank which helps smaller businesses find the right finance.
Find finance opportunities on the British Business Bank website.
Global Entrepreneurs Programme
If you are an entrepreneur or founder of an innovative technology business based overseas, you may be eligible for mentoring and business support to help you move your business to the UK.
Read about the UK government’s Global Entrepreneurs Programme on great.gov.uk.
Regional and local support and funding
Local enterprise partnerships (LEPs)
These are private and public sector partnerships that set local economic development strategy in England. They also coordinate local support, funding and guidance through Growth Hubs.
Scotland, Wales and Northern Ireland directly manage their programmes for funding, finance and support in their areas.
The Northern Powerhouse Investment Fund and the Midlands Engine Investment Fund are collaborations between LEPs and the British Business Bank. The funds provide commercially focused finance through small business loans, debt finance and equity finance funds.
Find out about LEPs on the LEP network website.
Freeports
You can access a wide range of customs and tax benefits by expanding your business within a UK Freeport.
Freeports are special areas in the UK where different economic regulations apply and where you can access planning, infrastructure and innovation support from the UK government.
If you choose to set up your business within a freeport, they can save you time and money through a range of customs and tax benefits including:
- increased capital allowances for investment in plant machinery, structures and buildings
- business rates relief
- employer National Insurance contributions relief
- deferrals and exemptions from import duties
Get more information on UK freeports on GOV.UK.
UK regional funding
There are several banks and funds which support companies in their own UK regions. You can find out more on the websites of the:
Scottish National Investment Bank, which invests in companies that address the challenges of the future such as climate change, ageing population and economic inclusion.
Development Bank for Wales, which offers flexible business finance for companies through loans or equity, secured and unsecured.
Invest Northern Ireland, which offers a number of funds to support small and medium sized companies, across both debt and equity markets.
Northern Powerhouse Investment Fund, which supports smaller businesses across the North of England
Midlands Engine Investment Fund, which provides investment to boost small and medium sized growth in the English West, East and South Midlands.
National and local support finder
Find a full list of support schemes for UK business on the GOV.UK tool Finance and support for your business