Budget breakdown: what does it mean for innovators?

Chancellor Jeremy Hunt announced what he claimed to be “a Budget for growth” in the Spring 2023 Budget statement, laying out plans to “harness British ingenuity to make us a science and technology superpower”.

The budget announced several measures affecting UK tech, from investment zones and tax to quantum computing and low-carbon energy.

Granted Director, Jon Williams, breaks down the headlines below.

Funding announcements

The budget promised to create 12 investment zones across the UK, funded by £80m each over the next five years.

These 12 zones will be centred around university tech hubs in England (West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, Teesside and, once again, Liverpool), Scotland, Wales and Northern Ireland.

The £80m budget will include a range of interventions including skills, infrastructure, tax relief and business rates retention.

Specific sector investments

Hunt announced a new “Plan for Quantum” – the vision to be a world-leading quantum-enabled economy by 2033 – with a research and innovation programme comprised of a £2.5bn pot.

The budget also pledged:

• £20bn investment over the next two decades on low-carbon energy projects, with a focus on carbon capture and storage
• £11bn on defence spending (including innovation)
• A new £900m investment on a supercomputing facility – Hunt outlined his plans for the UK to become a global leader in AI research, also announcing the launch of the Manchester Prize – an award of £1m every year for the 10 years to the person or team that does the most groundbreaking British AI research.

R&D tax relief and capital allowances

R&D tax relief: If a qualifying small or medium-sized business spends 40% or more of its total expenditure on R&D, it can claim a credit worth £27 for every £100 they spend.

Capital allowances: Outside the investment zones, businesses will be eligible for 100% first-year capital allowances, which means they can deduct the total cost of equipment from pre-tax profits.

We’re here to support you

If you want to understand what grant funding your project could be eligible for, how to build grants into your innovation or financial plan, or ensure a stable cash flow to your already funded project – get in touch.

Sources:
BBC News: https://www.bbc.co.uk/news/business-64789405
SCI News: https://www.soci.org/news/2023/3/spring-budget-2023-the-key-pledges-and-promises-for-science-and-industry