North West SMEs awarded £22.4 million in innovation funding throughout 2022

SMEs in the North West have greatly increased their share of Innovate UK grant funding in the past year with £22.4 million awarded for projects begun in 2022.

The amount awarded to the region’s small businesses represents 94.2% of the total innovation grant funding that went to businesses of all sizes in the region, according to analysis of Innovate UK data by funding specialist Catax. The figure represents an increase of 31.1 percentage points from 63.1% in 2021.

On a national basis, the proportion awarded to UK SMEs rose to 88.2% in 2022 – up 16.4 percentage points from 71.8% in 2021, itself little changed on 2020 – highlighting the importance of smaller firms to the health of the economy.

Laura O’Neill, Grants Manager at innovation funding specialist Catax, said:

“These results show very clearly how smaller companies are fundamentally important to the drive for innovation taking place in the UK. The vast majority of innovation grant money awarded to businesses is won not by large corporations but by SMEs.

“Yet the contribution SMEs make to the UK economy is at serious risk of being overlooked. Many of them are the larger companies of tomorrow, whose journey to success and growth is often obscured by the inevitable interest of other companies and subsequent acquisition.”

Chancellor Jeremy Hunt announced in the Autumn Statement last month that the amount of tax relief SMEs receive would be reduced for expenditure incurred from 1st April 2023. SMEs are currently allowed to deduct an extra 130% of qualifying costs from their profits but this will reduce to 86% (plus the normal 100% deduction). For loss-making companies, SMEs will be entitled to a tax credit worth up to 10% of the total surrenderable loss, instead of the current 14.5%.