We work with small startups every day and we know what a nightmare it can be to secure funding for your business – we’ve been there ourselves.
Here are 3 awesome Government schemes for startups that could really help you out…
1. Tax Relief for Companies Investing in Innovation
Did you know you might be able to claim up to 225% relief on corporation tax for any money spent on original research and product design?
“That is, for each £100 of qualifying costs, your company or organisation could have the income on which Corporation Tax is paid reduced by an additional £125 on top of the £100 spent” – HMRC
The Research and Design (R&D) Tax Credits scheme was introduced for SMEs in 2000 and for large companies in 2002. The Government wanted to encourage businesses to invest in research and design with the intention of generating innovation and wealth in the economy.
We’ve been making use of R&D Tax Credits for a few years now and we highly recommend looking into it as it could save you thousands in Corporation Tax bills.
Take a look at this guide to see what work qualifies as R&D and how you can make a claim.
2. Tax Relief for Investors in Startups
The Seed Enterprise Investment Scheme (SEIS) offers a range of tax relief to investors who buy shares in small, early-stage startups.
Here’s how it works…
Investors who purchase qualifying shares in a company that meets SEIS requirements, and who have UK tax liability, can claim income tax relief at 50% of the cost of the shares on a maximum investment of £100,000.
Who’s eligible?
In order to receive SEIS investment your company must:
- Be a UK-resident company
- Be unquoted (i.e. your shares are not sold on a recognised stock exchange like FTSE)
- Have 25 or under 25 employees
- Have gross assets of £200,000 or less
- Be less than 2 years old
- Must not have had any investment from a Venture Capital Trust (VCT), or issued any shares in respect of which it has submitted an EIS compliance statement
If you think you might be eligible for SEIS investment check out this article from someone who’s been there: How I secured £150,000 using seed enterprise investment scheme.
3. Win an Expert
The Technology Strategy Board’s Innovation Voucher scheme allows startups to apply for vouchers of up to £5,000 so that they can work with an external expert to develop and grow their businesses. You could get support from experts from universities, colleges, research and technology organisations, technical consultancies, design advisers and intellectual property advisers.
It’s also worth checking for local or regional Innovation Voucher Schemes. For example, Science City Bristol run a scheme for SMEs in South West England.
How do I apply?
If you want to apply for innovation vouchers from the Technology Strategy Board, you will need to do so through the portal on their website and the application process should take around half an hour.
The Board awards about 100 vouchers every 3 months around specific themes to businesses who meet the following criteria:
- You have to be a UK-based start-up, micro business or SME
- You can’t apply to work with someone you’ve worked with before
- You need to prove that your idea is challenging for your business and that you will need outside help
- Your idea should suit the priority themes
- The Technology Strategy Board will not award Innovation Vouchers to businesses more than once but you may still be chosen if you have received Innovation Vouchers through a different scheme.
Does your startup have any experience with Government schemes?