Spring Budget 2024: Key Policies for UK Innovators

GrantTree CEO Nicky Johnson summarises the key takeaways from the 2024 Spring Budget for UK innovators. 

In today’s Spring Budget, Chancellor Jeremy Hunt unveiled a range of policies impacting UK innovators, including a new £360 million fund for advanced manufacturers and the reinstating of the lower threshold for high-net-worth status, enabling thousands of people to remain angel investors. 

I’ve detailed these policies below. Before reading on, make sure you subscribe to GrantTree’s newsletter to receive all the latest news on UK innovation and government funding straight to your inbox.

Turning the UK into a world leader in manufacturing

As trailed on Monday, the chancellor announced a £360 million funding package designed to turn the UK into “a world leader in manufacturing”.

Targeted at a range of cutting-edge projects, this package includes:

  • £200 million joint investment in zero-carbon aircraft technology to develop a more sustainable aviation sector
  • £73 million for electric vehicle development
  • £92 million in joint government and industry investment to expand facilities for life-saving medicines and diagnostic products.

As with any government funding programme, the success of this initiative hinges on the effectiveness of the selection mechanism, i.e. how well the government can identify and support the most promising projects. 

My colleagues and I will share our thoughts on the mechanism once we know more about it.

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Previous high net worth threshold reinstated

The government will reverse the increase in the income threshold individuals must meet to qualify as high-net-worths and invest in early-stage businesses.

The government raised the threshold from £100,000 to £170,000 in January this year. However, the move faced considerable backlash from entrepreneurs and investors, who warned it would “disproportionately exclude women and underrepresented groups from investing opportunities.”

The reversal will allow thousands of people to continue acting as angel investors, making it easier for businesses to secure equity funding, a welcome development given the global decline in VC funding

The government also pledged to conduct further work to review the scope of the exemptions. 

AI skills for SMEs

The government unveiled a £7.4 million pilot programme that will help SMEs develop AI skills “of the future”.

The pilot will complement the SME Digital Adoption Taskforce, which will investigate how best to support the adoption of digital technologies by SMEs to boost their productivity.

Expert panel to improve R&D Tax administration

HMRC will establish an “expert advisory panel” to improve how the R&D Tax Relief scheme is administered. 

The panel will provide insights about cutting-edge R&D “occurring across key sectors such as tech and life science” and ensure official guidance remains useful and up-to-date. 

Bodies such as the Chartered Institute of Taxation (CIOT) and the Startup Coalition have criticised the scheme’s administration in recent months. 

The CIOT cited the agency’s pursuit of ineligible claims “could amount to an abuse of power” while the Startup Coalition said founders faced “ uncertainty, inconsistency and, in some concerning cases, incompetence” when interacting with the scheme.

Explore your funding options with GrantTree

Despite the policies announced in today’s Spring Budget, these remain challenging times for innovative UK businesses. Equity investment has declined.

If you are looking for external, non-equity funding in the form of innovation grants, loans, and R&D Tax Relief, GrantTree’s funding consultants are happy to discuss your options. 

To book a consultation, just get in touch.

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