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Brexit Transition Toolkit: Grants and Funding

6th November 2020

Brexit’s impact on Grants and Funding

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EU from a funding and investment perspective. Much of the current funding available to businesses is approved and regulated by the European Commission. The UK government has already acted to reassure companies regarding the short term availability of funding and while we await further guidance post Brexit the indications are that the government remain committed to providing funding, especially around innovative projects as highlighted below.

  • The Horizon 2020 programme was established by the European Union (EU) as a collaborative financial instrument that would help secure Europe’s global competitiveness in research and innovation. UK businesses can continue to participate in Horizon 2020 programmes and receive EU grant funding for the lifetime of individual projects, this includes projects finishing after 1 January 2021
  • The SME R&D tax relief scheme is classified as ‘Notified State Aid’; a form of public financial assistance that is approved and regulated by the European Commission, in line with state aid rules. These rules allow the EC to limit how much financial aid each country gives domestic businesses, ensuring a level playing field across the union. From 1 January 2021, the UK may be less restricted by EU state aid rules, however the current feeling is that the UK government have no plans to significantly change SME R&D tax reliefs.

As a consequence of Covid-19, many companies have used this as an opportunity to further automate processes, particularly where social distancing is not possible. The cost of investing in robotics, AI and machinery is expensive, however, there is a current enhancement to the Annual Investment Allowance to £1m until 31 December 2020, which can result in significant corporation tax savings and cashflow benefits.

ACTIONS

  • Review other areas of potential post Brexit support for investment including grants from Innovate UK and access to Catapult Centres to help develop new products
  • Review current funding arrangements – if you are a current Horizon 2020 grant holder, you can contact EUGrantsFunding@ukri.org if you have any queries and obtain guidance in relation to eligibility here: https://www.gov.uk/business-finance-support/horizon-2020-business-grants-uk#additional-information
  • Structural funds: review the actions you will need to take if you receive EU funding
  • Review Business Support Finder to identify other funding sources
  • Consider advancing capex investment before 31 December 2020 to take advantage of the £1m Annual Investment Allowance before it reduces to £200k from 1 January 2021
  • Consider R&D tax relief claims, ability to claim, and impact on existing claims
  • Review and apply for grants to assist with the impact of Brexit including investment in IT and training associated with improving Customs export declarations: https://www.gov.uk/guidance/grants-for-businesses-that-complete-customs-declarations#history

If you have any further enquiries please contact our Brexit Team via the below form.

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