What does the Spring Budget 2023 mean for the Innovation community? This article gives an insight into the budget and its implications for SMEs and innovators operating within the UK, highlighting the potential benefits for businesses looking to innovate and grow.
The Spring Budget UK 2023 has brought news for innovators and entrepreneurs across the country. The Chancellor has announced further support for R&D-intensive Small and Medium-Sized Enterprises (SMEs) and the creative industries, with the aim of encouraging innovation in the economy.
After reductions were made to Research and Development (R&D) tax relief in the Autumn Budget, there was considerable apprehension about the direction of innovation among small and medium-sized enterprises. Nonetheless, in the Spring Budget, Chancellor Jeremy Hunt revealed a partial reversal of the tax credit cuts from the previous year.
One of the most significant announcements was the enhanced rate of tax relief for loss-making companies. The Chancellor has introduced a new program aimed specifically at SMEs that are both research and development-focused and currently experiencing financial losses. An SME is categorized as "R&D intensive" if its qualifying R&D expenses amount to 40 percent or more of its overall expenditure. This is a welcome boost for businesses that are trying to innovate and develop new products and services but are struggling to make a profit.
“We are pleased to see the Chancellor's continued support for SMEs and innovation in the Spring Budget. The enhanced rate of tax relief for loss-making companies is particularly encouraging, as it will provide much-needed support to R&D-focused SMEs experiencing financial difficulties. The measures announced will ultimately help businesses innovate and develop new products and solutions."
Matthieu Michel, Operations Director, EIC
To achieve this, the Chancellor has transformed capital allowances to boost investment and simplified the tax system for SMEs. The changes will make it easier for businesses to access the support they need to grow and innovate.
The Spring Budget placed significant emphasis on innovation, outlining plans to increase investment in the UK's technology sector and businesses experiencing high levels of growth. The measures announced will help to create a more supportive environment for SMEs and innovators.
You can use the EIC Innovator Support Page to find out more information on funding opportunities available for Innovators and SMEs. Alternatively, you can reach out to the team of experts for information on how the EIC supports the innovation community.
