SMEs in Wales have vastly elevated their share of Innovate UK grant funding up to now 12 months, at a time when the financial contribution of smaller companies is beneath the highlight.
A research by innovation funding specialist Catax reveals that, of all innovation grant funding that went to enterprise initiatives began in Wales this 12 months, the proportion awarded to SMEs rose to 86.6% — up 50.4 share factors from 36.2% in 2021.
For initiatives begun in 2022, Welsh SMEs had been awarded £7.5 million whereas bigger firms in Wales had been awarded £1.2 million.
In stark distinction, for 2021, SMEs in Wales secured £10 million, whereas bigger companies had been awarded £17.5 million.
On a nationwide foundation, the proportion awarded to UK SMEs rose to 88.2% in 2022 — up 16.4 share factors from 71.8% in 2021, itself little modified on 2020.
Innovate UK is the UK’s nationwide innovation company. The way in which SMEs are handed the lion’s share of enterprise funding is testomony to the vital analysis and improvement they undertake.
And but it’s SMEs which have lately come beneath assault from the Authorities. Chancellor Jeremy Hunt introduced within the Autumn Assertion final month that the quantity of tax aid SMEs obtain can be diminished for expenditure incurred from 1st April 2023.
SMEs are at present allowed to deduct an additional 130% of qualifying prices from their income however it will scale back to 86% (plus the traditional 100% deduction). For loss-making firms, SMEs will likely be entitled to a tax credit score value as much as 10% of the entire surrenderable loss, as an alternative of the present 14.5%. Conversely, the Analysis & Growth Expenditure Credit score (RDEC) scheme for bigger firms was made extra beneficiant.
Laura O’Neill, Grants Supervisor at innovation funding specialist Catax, mentioned:
“These outcomes present very clearly how smaller firms are basically vital to the drive for innovation happening within the UK. The overwhelming majority of innovation grant cash awarded to companies is gained not by massive companies however by SMEs.
“But the contribution SMEs make to the UK economic system is at critical danger of being neglected. Lots of them are the bigger firms of tomorrow, whose journey to success and progress is commonly obscured by the inevitable curiosity of different firms and subsequent acquisition.”
Innovate UK additionally awards grants to charities, public sector organisations, educational establishments, Public Sector Analysis Institutions (PSREs), Analysis & Know-how Organisations (RTOs) and catapults. These had been excluded for the needs of the research.
