Expanding your business to the UK as a foreign organisation can be challenging, especially from a financial perspective. However, the UK government offers a variety of business grants and tax credits to help businesses of all sizes overcome these financial hurdles but sometimes it can be difficult to understand the process for making such applications. This is where our experts at UK Advisory Services can assist and guide you.

Our experts can help you in identifying the most relevant funding opportunities for your business, and assess your eligibility so that you can choose what’s best for your business. 

Understanding the Business Grants & Tax Credits for Foreign Businesses

1. Business grants are non-repayable funds provided by government bodies, local authorities, and private organisations to help businesses achieve specific objectives. These grants are typically awarded to businesses that are engaged in activities that promote economic growth, innovation, and social or environmental good.
   
   
2. Tax credits are financial incentives provided by the government to reduce the amount of tax that businesses owe.

Both of these can vary significantly in terms of eligibility criteria, funding amounts, and application processes.

Types of Business Grants and Tax Credits

There is a wide range of grants and tax credits available to help foreign businesses. Here are some of the most widely-used schemes:

Small Business Research Initiative (SBRI): The SBRI is a government-funded scheme that supports businesses to develop innovative solutions to real-world problems. It works by matching small businesses with public sector organisations that require innovative solutions. The public sector organisations provide the funding for the projects, and the small businesses develop and deliver the solutions.

Innovate UK: Innovate UK is a government agency that provides funding and support to businesses that are developing new products, processes, and services. The agency’s goal is to help businesses to grow and succeed by supporting innovation.

The agency’s goal is to help businesses to grow and succeed by supporting innovation. The agency’s funding programs can help businesses to:

• Develop new products and services
• Improve existing products and services
• Commercialise new technologies
• Internationalise their businesses

Regional Growth Fund (RGF): The RGF is a UK government-funded scheme that provides grants to businesses that are creating jobs and growing the economy in their region. The RGF has a proven track record of success in helping businesses to create jobs and grow the economy in their region. The fund has helped to create over 100,000 jobs and invest over £10 billion in the UK economy.

Enterprise Investment Scheme (EIS): The EIS is a tax relief scheme for individuals who invest in small, growing businesses. It is designed to encourage investment in these businesses, which can be riskier but also have the potential for higher returns. To be eligible for the EIS, a business must meet certain criteria, such as:

• Having fewer than 250 employees
• Having less than £15 million in gross assets
• Being trading or planning to trade within two years of receiving investment

Investors in EIS-qualifying businesses can claim several tax reliefs, including:

• Income tax relief of up to 30% of the investment amount
• Capital gains tax relief on any profits made from the investment
• Inheritance tax relief on the value of the investment, if it is held for at least two years

The EIS has several benefits for both investors and businesses. For investors, the EIS offers the potential for high returns and tax reliefs. For businesses, the EIS provides access to capital that they may not be able to obtain from banks or other traditional lenders.

Seed Enterprise Investment Scheme (SEIS): The SEIS is a tax relief scheme for individuals who invest in early-stage businesses. It is similar to the Enterprise Investment Scheme (EIS), but it offers even more generous tax reliefs to investors.

To be eligible for the SEIS, a business must meet certain criteria, such as:

• Having fewer than 25 employees
• Having less than £200,000 in gross assets
• Having been trading for less than two years

Investors in SEIS-qualifying businesses can claim several tax reliefs, including:

• Income tax relief of up to 50% of the investment amount
• Capital gains tax relief on any profits made from the investment
• Inheritance tax relief on the value of the investment, if it is held for at least two years

The SEIS is a popular program for investors who want to invest in early-stage businesses with high growth potential. It offers several generous tax breaks and other advantages, making it a very appealing investment opportunity.

Research and Development (R&D) tax credits: R&D tax credits are a tax relief scheme for businesses that are investing in research and development activities. The scheme is designed to encourage businesses to invest in innovation and to help them to commercialise their research findings.

To be eligible for R&D tax credits, a business must meet certain criteria, such as:

• The research must be new and innovative, and it must have the potential to lead to the development of new products, processes, or services.
• The research must be conducted at a commercial scale.
• The business must be able to demonstrate that the research has incurred costs.

If a business is eligible for R&D tax credits, it can claim a percentage of its research and development expenditure back from HM Revenue and Customs (HMRC). The percentage of tax relief that a business can claim depends on the type of research that they are conducting.

Business Grants and Tax Credits Statistics from the last five years

1. Below are the business grants provided to foreign businesses in the last five years.

This data is specifically from the UK government’s Department for Business, Energy & Industrial Strategy (BEIS). 

2. Below are the statistics of Tax Credits granted to foreign businesses by the UK government under Her Majesty’s Revenue and Customs (HMRC).

Steps to Follow when Applying for Business Grants or Tax Credits:

Identify Your Business Needs: The first step in applying for business grants or tax credits is to identify your specific business needs. What areas of your business could benefit from financial support? Whether you are looking for funds, research and development, create new jobs, or implement sustainable practices? Once you have a good understanding of your needs, you can start to research the various grants and tax credits that are available.

Research Available Grants/Tax Schemes: Research the various grants and tax Schemes available in the UK. You can find comprehensive information on government websites, local business support organisations, and through professional advisors. When researching grants and tax credits, it is important to consider the following factors:

• Eligibility criteria: Make sure that your business meets the eligibility criteria for the grants and tax credits that you are interested in.
• Funding amount: Consider the amount of available funding and whether it is sufficient to meet your needs.
• Application process: Familiarise yourself with the application process and the required documentation.
• Deadline: Be aware of the deadlines for submitting applications.

Eligibility Assessment:  Once you have identified a few grants or tax credits that you are interested in, you should carefully assess your eligibility. This involves reviewing the eligibility criteria and making sure that your business meets all of the requirements. If you are unsure about your eligibility, you should contact the grant or tax credit provider for more information.

Prepare a Strong Application: When applying for business grants or tax credits, it is important to submit a well-prepared application. This includes:

• Clearly outline your business objectives and how the grant or tax credit will help you achieve them.
• Providing detailed information about your business, including its financial performance and growth plans.
• Submitting all of the required documentation.

Professional Advice: Given the complexity of tax credit & grants schemes, it’s advisable to seek advice from professionals who can guide you through the application and claims process. Their expertise can help you maximise your benefits.

The experienced UK Advisory Services team will work with you to identify the most relevant funding opportunities and develop winning market launch strategies for your business. Contact us today to schedule a consultation.