Innovate UK, part of UK Research and Innovation, is investing up to £25million to support and encourage SMEs to develop innovations for the benefit of UK R&D. Applicants must demonstrate their company’s potential for successful commercialisation, growth and exports.
Innovate UK Smart Grants Guidance
Innovate UK provides government funding to companies across the UK through grant funding competitions. It incentivises and rewards research and development (R&D) activities.
Some competitions are challenge-based, whereas others see businesses from any industry/sector apply.
Innovate UK Smart grants
Innovate UK Smart grants are awarded for innovative breakthroughs and game-changing ideas, through a competitive application process.
Applicants must display their potential to gain market share and generate economic impact and exports, showing either:
- A groundbreaking idea for a new product or process
- A new use for an existing product or process that is currently unavailable
Innovate UK was established in 2007 and has been helping companies ever since, providing valuable funds that can be invested into businesses.
What do Innovate UK grants fund?
Funding levels differ depending on the stage that the research and development project is at and the size of the company.
Examples of qualifying projects:
- Feasibility studies to assess the potential of an idea (market research)
- Industrial research to improve existing products and processes
- Experimentation with the development of new products and processes
The grants are not limited to any particular industry or area of technology.
Who can apply for Innovate UK grants?
Project leaders from businesses of any size can apply for grants through the Innovate UK Smart programme.
As a requirement, the business will need to be registered and conduct its R&D in the UK.
Applicants must describe the need or challenge they have identified and how their innovation will meet this, going beyond competitors and what is currently considered state-of-the-art.
What kind of projects are eligible for Innovate UK grants?
The following types of projects which focus on research and development to generate new products, services or processes can qualify:
- Fundamental research
- Feasibility studies
- Industrial research
- Experimental development
What themes do Innovate UK R&D grants focus on?
Innovate UK Smart grants fund R&D projects which encompass one of five strategic themes:
- Future economy
- Growth at scale
- Global opportunities
- Innovation ecosystem
- Government levers
Foundations are also considered within assessing applications such as responsible innovation, innovation talent and skills, equality and diversity and inclusion, as well as design and scientific research.
What type of work isn’t eligible for R&D grants?
Innovate UK Smart grants fund a wide range of projects. Whilst a lot of criteria is considered, there are some specific areas that are ineligible.
Examples of projects that do not qualify are:
- Marketing and sales projects
- Failure to define the size, potential or market accessibility of the innovation
- Failure to prove the project has economic benefits, a significant return on investment (ROI) potential or capability for growth and scaling
- Failure to provide realistic and measurable plans to commercialise innovation after completion
Other factors are export performance for a project’s ROI and domestic inputs usage. For example, a grant would not be given to a baking company on the condition it exports a certain quantity of bread to another country, or on the basis it uses 50% of UK flour in its product.
How to apply for an R&D grant
Visit the Innovation Competitions page of the government website or search for ‘smart funding’ if desired.
Companies must register before completing an application via the Innovation Funding Service.
Applicants must state the need or challenge they have identified and how their innovation will meet this.
They will need to demonstrate details of their project that evidence how a clear market will want to use/buy the product, process or service.
The application must clearly explain why a grant is important to the development of the project and the consequences of it not being awarded.
Each competition has a deadline date and time within the brief. It is advised to apply directly on the GOV.UK website and not through a third-party site.
Applications will be assessed and scored and those selected to proceed will be invited to attend an interview, after which a decision will be made.
Knowing exactly what criteria needs to be met in your application and ensuring it is of the highest quality in such a competitive process, with low success rates, can be a daunting task.
You can seek the help of randd uk to give your company the best chance of being awarded an R&D tax grant.
Contact our team of experts by calling us on 01332 409 711 or emailing [email protected]
Innovate UK Smart Grants FAQs
Innovate UK is the country’s leading agency in rewarding R&D. It helps companies to grow through the development and commercialisation of new products and processes.
Innovate UK grants are awarded via competitions that reward successful applicants with R&D tax funding for innovative projects.
Monetary funding is provided in areas to assist with the declared R&D project.
Innovate UK is investing up to £25million to support and encourage SMEs. A successful application will receive a share of the designated amount for the competition in which it has been submitted.
The general timescale from a competition opening for applications, through to the successful applicants being notified, is around five months.
Applicants have a window of around three months to submit an application and seek any support required from Innovate UK regarding any disability or neurodiversity. The assessment and decision-making process will then take another two months.
Success rates for Innovate UK grant applications range from 5-10%. The grants are highly competitive as there is a large number of applications for each competition, many of which are of very high quality.
Innovate UK is unable to award funding to businesses or organisations that are considered to be in financial difficulty. All applicants are subjected to financial viability and eligibility checks to ensure they are suitable for public funding.
Your total eligible project costs will also be checked to ensure they meet the funding criteria and you will be assigned a monitoring officer who will make sure your project is in compliance.
A grant will generally be paid every three months, whereas R&D tax credits are provided in the form of tax relief on money already spent.
R&D tax credits and grants can work against one another in some ways, but there are other aspects in which they work well together. If a grant is awarded to a company for innovation, then this can be shown to bypass various stages of the R&D tax credit application.
Businesses that are still applying for the SME scheme cannot apply for both at the same time as SME tax relief is considered to be generous.
Companies awarded grants may still apply under the RDEC scheme which, despite the Merged scheme being introduced in April 2024, remains open for backdated claims until March 31st 2026.
Innovate UK’s grants are paid out without any need for return. However, when you have been notified of a successful application, you will have 90 days to complete your project set-up administrative process. Failure to do this could result in the funding being withdrawn.
You can either re-submit your application for the same competition in the next funding round or select a different competition for which your project may also be suitable. However, applicants can only apply twice in the same competition, and the original application should be significantly changed using the feedback from Innovate UK before re-submitting.