Our detailed summary of the key announcements from the 2024 Autumn Budget impacting innovative UK companies.
Chancellor Rachel Reeves has just delivered Labour’s first Budget in 14 years. In it, she unveiled a swathe of financial measures–from tax hikes to fiscal giveaways–with significant implications for innovative UK businesses.
Designed to strengthen the nation’s finances, revitalise public services, and ‘crowd-in’ private investment, the budget allocated more than £20 billion for public sector R&D investment while increasing capital gains tax (CGT) and employers’ National Insurance Contribution (NIC).
Below is a summary of the key announcements Reeves unfurled at the House of Commons dispatch box. Stay updated on the latest government funding news by signing up for GrantTree’s newsletter.
£20 billion for R&D
The Chancellor promised to protect “record levels of government R&D investment” with more than £20 billion allocated in 2025-26.
This includes:
- £13.9 billion for the Department for Science, Innovation and Technology to invest in R&D in 2025-26
- £6.1 billion for core research, covering Research Councils such as Innovate UK, UKRI talent, UKRI International subscriptions, and funding for National Academies
- Fully funding UK companies’ participation in Horizon Europe, the EU’s key funding programme for research and innovation
- At least £40 million over the next 5 years for the commercialisation of university research
- Up to £37 million in 2025-26 for the Made Smarter Innovation programme
- £25 million in 2025-26 to launch a new multi-year R&D Missions Programme to crowd in private investment to solve targeted problems
Sector-specific investment
The Chancellor announced specific funding for sectors with the “biggest growth potential”:
- £3.9 billion of funding in 2025-26 for Carbon Capture, Usage and Storage projects
- Upwards of £2 billion over the next 5 years for the automotive sector, including the manufacturing of zero-emissions vehicles
- £975 million to fund R&D the latest aerospace technology over the next 5 years
- Up to £520 million for a new Life Sciences Innovative Manufacturing Fund
- A real-term uplift in the budget of the National Institute for Health and Care Research (NIHR)
R&D Tax Relief maintained
The government is maintaining R&D Tax Relief at current levels.
The Chancellor shared this update at the International Investment Conference earlier this month.
This is welcome news for businesses still coming to terms with the major reforms introduced by the previous government.
Business tax changes
The government is increasing employer NIC from 13.8% to 15% from April 2025.
The government is also decreasing the secondary threshold from £9,100 to £5,000, meaning many more companies will have to pay NIC.
Meanwhile, Reeves announced that the government would maintain the 25% Corporation Tax Rate and the Corporation Tax Small Profits Rate.
Employment Allowance increased
The Chancellor announced an increase in the Employment Allowance from £5,000 to £10,500 from 6 April 2025.
As a result, 865,000 employers won’t pay NIC next year, while 1 million will pay the same or less amount of NI as they do currently–a boon for small businesses.
EIS and VCT extended
The government is extending the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) scheme for 10 years until 6 April 2035.
Both schemes offer tax relief to people investing in small and medium-sized businesses.
British Business Bank funding
£250 million in 2025-26 for the British Business Banks’s small business loans programmes.
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