R&D intensity is a useful measure of how much a country invests in research and development relative to the size of its economy. It can help companies identify markets with strong innovation activity and policy commitment. It does not, by itself, show whether a market is easy to access, commercially attractive or suitable for a specific investment project.
For companies comparing global funding opportunities, R&D intensity should be reviewed alongside funding accessibility, business participation, grant availability, R&D tax design, evidence requirements, sector focus and compliance risk.
This article is based on insight from Innovation Orbit 2026, FI Group by EPSA’s international guide to grants, R&D tax credits and public funding opportunities across key global markets.
Download Innovation Orbit 2026
Area |
What companies should understand |
R&D intensity |
A useful indicator of national R&D investment, but not a complete funding assessment |
Funding access |
A high-performing innovation market may still have complex rules, strong competition or narrow eligibility |
Business participation |
Private-sector activity affects how effectively public incentives translate into commercial innovation |
Policy maturity |
Strong funding markets usually combine tax incentives, grants, sector priorities and clear governance |
Compliance |
Higher-value regimes often come with stronger evidence, audit and documentation requirements |
Commercial relevance |
Companies should assess whether incentives fit their own projects, costs, sectors and markets |
R&D intensity measures research and development expenditure as a share of economic output. It is commonly used to compare how much countries invest in R&D relative to the size of their economies.
For governments, R&D intensity can help show national innovation performance and policy ambition. For businesses, it can indicate where there may be strong research capacity, skilled talent, public investment and established innovation infrastructure.
Innovation Orbit 2026 identifies countries such as South Korea, Sweden, the United States, Japan, Belgium, Germany and China among high R&D intensity markets. These countries are important reference points for companies assessing global innovation activity.
However, a high R&D intensity figure does not automatically mean a company will find the best funding opportunity there. The practical question is different: can the company access relevant support for its own project, at the right time, with the right evidence and acceptable compliance risk?
R&D intensity helps companies understand where innovation investment is concentrated. It does not explain how public funding works in practice.
A company still needs to assess:
A market can invest heavily in R&D and still be difficult to access if the rules are narrow, the evidence burden is high or the funding route does not match the company’s project.
Innovation Orbit 2026 uses a broader funding positioning view, bringing together R&D intensity, innovation system maturity and business participation. This is a more useful way to think about funding strength from a company perspective.
Factor |
Why it matters |
R&D intensity |
Shows the scale of national R&D investment relative to the economy |
Business participation |
Indicates how active companies are in R&D and innovation investment |
Funding maturity |
Shows whether the market has established, accessible and well-managed incentive mechanisms |
Sector alignment |
Determines whether public priorities match the company’s technology, industry or investment plan |
Incentive design |
Affects cash flow, claim value, timing and administrative burden |
Compliance requirements |
Determines the evidence, governance and audit exposure attached to the opportunity |
A strong funding market is not simply a market with high R&D spend. It is one where companies can identify relevant support, understand the rules, gather the right evidence and integrate incentives into investment planning.
Public funding creates more value when businesses invest alongside it. Business participation shows whether the private sector is actively carrying out R&D, developing new technologies, investing in productive capability and taking innovation projects through to deployment.
In markets with strong business participation, public incentives can help scale activity and reduce risk. These markets may have sophisticated grant systems, established tax regimes and clear routes for innovation-led companies.
In markets where business participation is lower, public funding may be used to stimulate private investment. This can create opportunity, but companies need to test how practical the funding route is. The existence of a public programme does not guarantee that it is accessible, suitable or commercially worth pursuing.
For CFOs and strategy teams, business participation gives useful context. It can help indicate whether the funding market is mature, how competitive it may be, and what level of evidence a company may need to provide.
Funding maturity refers to how developed and usable a country’s incentive system is for businesses.
A mature funding market will typically have some combination of:
A less mature market may still offer valuable incentives, but the company may face more uncertainty around interpretation, timing, evidence or administration.
This matters when comparing global investment locations. A high headline benefit is less useful if the company cannot access it with confidence or if the internal cost of compliance is too high.
High R&D intensity countries can indicate where innovation activity is concentrated and where governments have made research and development a priority.
For companies, these markets may offer:
They may also involve:
This is why high R&D intensity should be treated as a starting point, not a decision in itself.
Some markets may have lower R&D intensity but still offer useful public funding opportunities. This can happen where governments are using grants, tax incentives or EU-backed mechanisms to encourage private-sector investment.
Innovation Orbit 2026 points to markets such as Portugal and Poland as examples where public support and EU mechanisms are helping increase innovation activity. It also identifies countries where business participation remains lower, which can create a stronger role for public incentives in mobilising private investment.
For companies, this can create practical opportunities where:
The point is not to favour lower-intensity markets over high-intensity markets. The point is to assess fit. A funding route is valuable when it matches the company’s project, timing, cost base and compliance capacity.
A useful comparison should go beyond headline R&D spending or published incentive rates.
Companies should assess each market against a practical set of criteria.
Question |
Why it matters |
What activities will take place in this country? |
Eligibility depends on local project activity and cost location |
Which incentives are available? |
Grants, R&D tax credits, loans and subsidies have different rules and cash-flow effects |
Does the project match public priorities? |
Sector alignment can affect grant competitiveness and funding relevance |
When will costs be committed? |
Some funding routes require approval before work starts |
Which costs are material? |
Labour, subcontracting, equipment and overheads may receive different treatment |
What evidence is available? |
Documentation quality affects claim strength and grant assessment |
Can incentives be combined? |
Grant funding can affect R&D tax treatment and wider incentive value |
What is the review risk? |
Compliance requirements vary significantly between markets |
Is the internal effort justified? |
Funding value should be assessed against time, resource and risk |
This type of comparison gives companies a clearer view of whether a market is genuinely attractive for a specific project.
International groups often spread innovation activity across several countries. R&D may be carried out in one market, manufacturing in another, IP held elsewhere, and commercialisation managed through a wider group structure.
This creates several funding questions:
A country-by-country funding review may miss these issues. A coordinated approach helps companies understand how local incentives interact with group structures and global investment plans.
For CFOs, R&D intensity should be treated as a market indicator, not a funding strategy.
The stronger approach is to assess whether incentives can support the company’s own investment case. That means reviewing expected value, timing, probability of access, compliance requirements and internal workload.
A market with high R&D intensity may be attractive, but it may also require strong technical evidence and careful governance. A market with lower R&D intensity may still provide a useful grant or tax incentive if the project aligns with local policy priorities.
The decision should be based on fit, value and risk, rather than headline innovation rankings.
FI Group by EPSA helps companies assess innovation funding opportunities across countries, sectors and project types.
Our teams support businesses with grant funding, R&D tax incentives, international funding comparisons, project pipeline reviews, technical documentation, cost analysis, incentive compatibility and compliance management.
For companies comparing where to invest, an early funding review can help identify which markets offer relevant support and which opportunities require action before costs are committed.
This article is part of a wider series based on Innovation Orbit 2026, FI Group by EPSA’s global guide to innovation funding.
Download the full guide to compare grants, R&D tax credits and public incentives across Europe, the Americas, Asia and Oceania, and to understand how funding opportunities vary by country, sector and project type.
Download Innovation Orbit 2026
If your organisation is comparing funding opportunities across multiple markets, FI Group by EPSA can help assess which incentives are relevant to your project pipeline and investment plans.
R&D intensity measures research and development expenditure as a share of economic output. It is used to compare how strongly countries invest in R&D relative to the size of their economies.
No. High R&D intensity can indicate strong innovation activity, but companies also need to assess funding access, eligibility rules, sector fit, documentation requirements, incentive design and compliance risk.
R&D intensity can help companies identify markets with significant innovation activity, research capacity and policy commitment. It is a useful starting point for international funding comparison.
Companies should assess business participation, grant availability, R&D tax design, eligible costs, timing rules, local substance requirements, IP treatment, incentive compatibility and evidence requirements.
Business participation refers to the level of private-sector involvement in R&D and innovation activity. It helps show whether companies are actively investing and using public incentives to support commercial projects.
Yes. Some markets with lower R&D intensity may use grants, tax incentives or EU-backed mechanisms to stimulate private investment. The value depends on project fit, timing, cost base and accessibility.
Funding maturity affects how predictable and usable an incentive system is. Mature systems often have clearer rules, established claim processes and better-defined compliance expectations.
International groups may have activity, costs, IP, subcontracting and group recharges across several countries. A coordinated review helps identify opportunities and avoid conflicts between local funding rules.
R&D intensity can help inform market comparison, but it should be used alongside practical funding factors such as available incentives, evidence requirements, sector priorities and expected cash-flow impact.
You can download Innovation Orbit 2026, FI Group by EPSA’s international guide to grants, R&D tax credits and public funding opportunities across key global markets.
Andy Burnham has begun his premiership with a rapid restructuring of government, a renewed focus on the cost of living and a commitment to develop a new ten-year plan for the UK.
Since entering Downing Street on 20 July 2026, Burnham has appointed John Healey as Chancellor of the Exchequer, abolished the dedicated Department for Science, Innovation and Technology and given artificial intelligence greater representation at Cabinet level.
For businesses investing in research, technology and product development, the immediate rules governing R&D tax relief and innovation funding have not changed. However, the new structure of government could significantly influence future funding priorities, industrial strategy and the delivery of innovation policy.
One of the government’s first major structural decisions was the abolition of the Department for Science, Innovation and Technology, commonly known as DSIT.
Many of the department’s responsibilities are being transferred into a new Department for Business, Innovation, Science and Trade, led by Jonathan Reynolds. Other digital and technology responsibilities are expected to sit across the Cabinet Office and the Department for Digital, Culture, Media and Sport.
The stated rationale is to bring science and technology policy closer to business, investment and the UK’s wider industrial strategy.
In principle, this could improve coordination between:
For innovative businesses, closer alignment between research policy and commercial growth could create opportunities. New funding programmes may be designed with a stronger emphasis on economic impact, productivity, private investment and the creation of skilled employment.
However, the decision has received a cautious response from parts of the technology sector. Industry representatives have warned that a large departmental reorganisation could temporarily slow decision-making, disrupt established relationships and require technology businesses to compete with other industries for government attention.
The central question will be whether the new department can combine science and business policy without reducing the specialist focus previously provided by DSIT.
Although the dedicated technology department has been abolished, artificial intelligence appears to have been given greater political prominence.
Kanishka Narayan has retained responsibility for AI and will attend Cabinet. His existing ministerial portfolio has included AI opportunities, the AI Security Institute, semiconductors, technology-led growth and online safety.
This suggests the government sees AI as an economic, public-service and national-security priority, rather than simply another area of technology policy.
For businesses, the appointment could lead to further activity in areas such as:
The previous government had already committed substantial funding to AI research, including support for new laboratories at the University of Oxford and University College London. The future of individual programmes will depend on departmental budgets and ministerial decisions, but the elevation of the AI portfolio indicates that the technology will remain central to government policy.
Burnham has also cancelled the previous government’s proposed national digital identity programme.
The scheme had been intended to support access to public services and provide digital proof of identity for activities such as right-to-work checks. Its cancellation represents a broader change in political priorities, with resources being redirected towards more immediate cost-of-living measures.
However, cancelling the national programme does not necessarily mean the end of the UK’s commercial digital identity market.
The statutory framework for private digital verification services already supports a growing number of certified identity, right-to-work and right-to-rent services. The government’s digital identity register contained dozens of certified providers and services before the new administration took office.
FinTech, identity and compliance businesses should therefore distinguish between the cancelled central government scheme and the wider commercial market for digital verification.
As part of its initial cost-of-living programme, the government has announced that VAT on domestic electricity will be reduced from 5% to zero from 1 October 2026.
The measure is expected to reduce the annual bill of a typical household by approximately £45. The government has said that the cost will initially be funded through savings associated with cancelling the national digital ID programme.
Although the direct measure relates principally to household expenditure, energy affordability and infrastructure will also remain important issues for innovative businesses.
AI, advanced manufacturing, data centres, laboratory facilities and other energy-intensive sectors increasingly depend on access to reliable and competitively priced electricity. Future decisions relating to grid capacity, planning and energy generation could therefore have a substantial effect on the UK’s ability to attract and retain innovation-led investment.
Devolution and regional economic development have been central to Burnham’s political approach.
The new government is expected to place greater emphasis on distributing investment and decision-making beyond London and the South East. Burnham has also committed to presenting a new ten-year plan for the country later in 2026.
This may affect how future business support and innovation programmes are assessed.
Companies applying for grants, public investment or government-backed programmes may increasingly need to demonstrate benefits such as:
For businesses based outside London, the renewed emphasis on regional growth could produce additional opportunities. Companies should nevertheless expect stronger requirements to evidence the economic outcomes generated by their projects.
None of the government’s initial announcements directly changes the legislation governing R&D tax relief.
Businesses should therefore continue preparing claims in accordance with the current merged R&D expenditure credit and enhanced R&D intensive support rules. Existing submission deadlines, record-keeping requirements and expectations around technical evidence remain applicable unless HMRC or the Treasury announces a formal change.
The appointment of John Healey as Chancellor will nevertheless be important. The Treasury will determine future tax policy, departmental spending settlements and the overall level of support available for business investment. Healey has previous Treasury experience and his appointment has been presented as a signal of fiscal discipline alongside the government’s more interventionist economic objectives.
Innovative businesses should monitor future fiscal announcements for potential changes involving:
The first major Budget or fiscal statement under the new Chancellor will provide a clearer indication of how innovation incentives fit within the government’s economic programme.
The abolition of DSIT does not automatically cancel existing grant competitions or previously awarded funding.
However, responsibility for programmes may move between departments, and future competitions may be redesigned to reflect the priorities of the new government. Businesses should pay close attention to announcements from UK Research and Innovation, Innovate UK and the new business department.
Likely areas of continuing or increased interest include:
Businesses should continue submitting applications against current eligibility rules and deadlines. Political or departmental restructuring is not, by itself, a reason to delay a viable project.
The regulatory framework for financial services has not changed as a direct result of the new administration. The Financial Conduct Authority, Prudential Regulation Authority and Bank of England continue to operate under their existing responsibilities.
The Financial Services and Markets Bill is also continuing through Parliament. Its proposals include changes to the Financial Ombudsman Service, the transfer of Payment Systems Regulator functions to the FCA, consumer credit reform, provisional regulatory licences and changes to bank ring-fencing.
The Bill completed its House of Lords committee stage in July, with report stage scheduled to begin on 7 September 2026. Future parliamentary dates remain subject to change.
FinTech businesses should therefore continue preparing for the proposed regulatory changes while monitoring whether the government alters the Bill’s timetable or priorities.
The changes announced so far are significant at a government level, but businesses should avoid making premature assumptions about the future of individual incentives or programmes.
Companies should:
The greatest immediate change is not to the eligibility rules for innovation support, but to the government institutions responsible for setting and delivering policy.
Burnham’s initial decisions indicate a government focused on regional growth, industrial strategy, AI and more visible support for household finances.
Bringing science, technology and business policy into a larger department could provide a more direct route from research to commercial investment. It could also create administrative disruption and reduce the specialist attention available to certain sectors.
More detail will be needed before businesses can fully assess the long-term implications.
For now, companies should continue pursuing qualifying R&D tax relief and innovation funding opportunities while ensuring their projects can demonstrate clear technical, commercial and regional value.
FI Group supports businesses throughout the innovation funding process, from identifying eligible R&D activity and preparing robust tax relief claims to assessing grant funding opportunities. Contact our team to discuss the funding options available for your innovation projects.
The BioIndustry Association’s latest financing report points to renewed investor confidence in UK biotech. However, the concentration of capital in a small number of large transactions and continued weakness in public markets mean companies still need a deliberate, balanced funding strategy.
UK biotech companies are operating in a funding environment that is improving, but remains highly selective.
The underlying scientific opportunity is strong, particularly across therapeutics, AI-enabled drug discovery, diagnostics and platform technologies. However, the route from early research to commercialisation remains long, capital intensive and exposed to technical, regulatory, manufacturing and market risk.
The BioIndustry Association’s UK biotech financing report for the second quarter of 2026 provides encouraging evidence that private investment is returning. It also shows why companies should look beyond the headline totals when planning how to finance their next stage of development.
According to the BIA, UK biotech companies secured £2.11 billion in total equity financing during Q2 2026. Venture capital accounted for £2.05 billion of this amount, making it the strongest quarter for UK life sciences venture investment in five years.
Total venture investment for the first half of 2026 reached £2.6 billion. This was already higher than the amount raised during any complete year between 2022 and 2025.
The UK also maintained its position as Europe’s leading biotech venture market. UK companies accounted for approximately 61% of the £3.3 billion invested across Europe during the quarter.
These are significant figures, but they require context.
Isomorphic Labs’ £1.6 billion Series B financing represented most of the capital raised. The transaction is a major endorsement of the UK’s position in AI-enabled drug discovery, but it also has a substantial effect on the overall market data.
Excluding this transaction, UK biotech companies still raised approximately £498 million in venture capital during the quarter. This was considerably higher than the £279 million recorded in Q2 2025, suggesting that the improvement was not limited to one exceptional deal.
The composition of the remaining investment is also relevant.
Eight seed-stage companies raised a combined £51 million, with an average financing of approximately £6.4 million. Series A companies raised around £190 million, while later-stage companies raised approximately £224 million when the Isomorphic Labs transaction is excluded.
The BIA also reported improving activity in the £10 million to £25 million funding bracket. Twelve companies completed rounds of this size during the first half of 2026, twice the number recorded during the whole of 2025.
This middle section of the funding market is particularly important. Companies at this stage may have moved beyond initial proof of concept but still need substantial capital to complete preclinical development, clinical studies, regulatory work, manufacturing development or commercial validation.
Improved access to capital at this level can help more companies move towards meaningful value inflection points, rather than becoming stranded between early-stage finance and larger institutional rounds.
The BIA’s figures indicate a recovery in investor confidence, but they should not be interpreted as a return to easy capital.
A large proportion of investment remains concentrated in companies that can demonstrate differentiated intellectual property, a credible development programme and a substantial commercial opportunity. Investors will continue to scrutinise the evidence supporting the science, the management team, the regulatory route, the addressable market and the use of funds.
The funding requirement therefore needs to be connected to a clearly defined milestone.
For an early-stage company, that milestone might be validating a biological target, developing an assay or completing an initial proof of concept. For a clinical-stage business, it may involve generating safety data, reaching a clinical readout or developing an effective manufacturing process.
The purpose of the funding round should be to reach a point that materially reduces risk or strengthens the company’s position for the next financing event.
The contrast between private and public markets is one of the most important findings in the BIA report.
While venture investment increased substantially, no UK biotech initial public offerings were completed during the first half of 2026. UK public market follow-on financing reached £58 million during Q2, an improvement on both Q1 2026 and Q2 2025, but still modest compared with activity in other European and US markets.
The five largest UK follow-on transactions were all completed on AIM, with no UK biotech follow-on activity recorded on NASDAQ.
This continued weakness affects more than companies currently considering a listing. Public market conditions influence exit expectations, investor time horizons and the ability of private companies to raise larger rounds later in their development.
Leadership teams may therefore need to plan for a longer period of private ownership and ensure that their financing strategy does not depend on public market access becoming available at a particular point.
While venture capital will remain critical for scaling biotech companies, it should not be the only tool used to finance innovation.
It is helpful to separate the funding landscape into four broad categories:
Grant funding can be particularly relevant where a project addresses a clear technical challenge and can deliver wider economic, health or scientific benefits. It may help a company generate evidence, reduce technical risk or reach a milestone before seeking its next equity round.
However, grants should support the development plan rather than determine it. Applying for every available competition is rarely the right approach. The project must fit the funder’s objectives, eligibility requirements and assessment criteria, while also advancing the company’s own commercial strategy.
R&D tax incentives can form another part of the funding mix by recognising eligible expenditure incurred while resolving scientific or technological uncertainty. Claims need to be supported by clear technical and financial evidence, and the interaction between grants, subsidies and R&D tax relief should be considered before funding decisions are finalised.
The BIA report also highlights Novartis’ agreement to acquire UK biotech company Myricx Bio for up to $1.5 billion.
Transactions of this kind matter because they can return capital to investors, founders and employees. Some of that capital may then be reinvested into new companies, funds and research programmes.
A functioning biotech ecosystem requires both investment into companies and credible routes through which investors can realise returns. Venture rounds, licensing agreements, strategic partnerships, acquisitions and public markets all contribute to this cycle.
The improvement in private investment is therefore encouraging, but sustained recovery will depend on the market continuing to generate commercial outcomes as well as fundraising announcements.
For biotech companies, the practical response should be deliberate.
The starting point should be a fully costed development plan that identifies the company’s principal technical, regulatory, manufacturing and commercial risks. Each proposed funding source should then be matched to a specific milestone within that plan.
Companies should consider:
Funding materials should also be consistent. The technical plan, commercial model, grant applications, investor presentation and financial forecasts should describe the same development route and use compatible assumptions.
This preparation will not remove fundraising risk, but it can improve credibility and allow companies to respond more effectively when suitable funding opportunities arise.
The BIA’s Q2 2026 report provides credible evidence that UK biotech venture investment is recovering. Capital is beginning to reach companies across seed, Series A and later-stage rounds, while the UK continues to attract a substantial share of European biotech investment.
Nevertheless, the market remains uneven. One exceptional transaction accounts for much of the quarterly total, and public market financing continues to lag behind private investment.
For biotech companies, the strategy needs to be balanced. Equity should be reserved for milestones that can support meaningful growth or valuation improvement. Grants, R&D tax incentives and other non-dilutive routes should be used to reduce defined areas of technical and commercial risk.
FI Group by EPSA can help biotech and life sciences companies map their technical, commercial and funding milestones, then identify which grants, tax incentives and wider financing routes fit each stage.
Contact the team today to assess your non-dilutive funding needs.
Global innovation funding is becoming a major factor in investment planning. Governments are using grants, R&D tax incentives and wider public funding routes to attract high-value activity, strengthen industrial capability and support strategic technologies.
For companies, this creates opportunity and complexity. Funding can improve project economics, support cash flow and influence where investment takes place. It can also add compliance risk if eligibility, evidence, local substance, IP and grant compatibility are not reviewed early.
This article is based on insight from Innovation Orbit 2026, FI Group by EPSA’s international guide to grants, R&D tax credits and public funding opportunities across key global markets.
Download Innovation Orbit 2026
Trend |
What it means for businesses |
| Public funding is being used to attract investment | Governments are competing for R&D, manufacturing, clean technology and strategic industrial projects |
| R&D tax incentives remain important | Tax incentives continue to support private-sector R&D, but rules and documentation requirements vary by country |
| Grants are being used for wider investment priorities | Support increasingly covers CAPEX, decarbonisation, digital transformation, energy efficiency and deployment |
| Business participation matters | Strong public funding systems need private-sector investment to translate incentives into economic impact |
| Mature markets are becoming more selective | Companies need stronger evidence, clearer project definition and better governance |
| International comparison is now essential | Funding value, risk and timing differ significantly between countries and regions |
Governments are using public funding to influence where companies invest and which technologies move from development into use.
This is visible across several themes:
The direction is commercial as well as political. Countries want to attract private-sector investment, develop skilled jobs, strengthen supply chains and build domestic capability in high-value sectors.
For companies, this means public funding should be assessed as part of market and investment planning. A project that looks marginal without incentives may become viable with the right grant, tax credit or public funding route. A project that appears attractive in one jurisdiction may have a different risk and return profile in another.
R&D intensity is often used to compare how much countries invest in research and development relative to the size of their economy. It can help identify markets with strong innovation activity, established research capacity and public-sector commitment.
However, R&D intensity alone is not enough to assess funding opportunity.
A country may invest heavily in R&D, but businesses still need to understand:
Innovation Orbit 2026 identifies markets such as South Korea, Sweden, the United States, Japan, Belgium, Germany and China among high R&D intensity countries. For companies, the point is not simply to follow the highest-spending markets. The better question is whether a specific country has the right combination of incentives, business participation, sector fit and compliance certainty for the project.
Public funding does not create innovation outcomes on its own. It needs private-sector participation.
Where businesses are active investors in R&D and innovation, public incentives can help increase scale, reduce risk and encourage faster deployment. Where business participation is weaker, governments may use funding mechanisms to stimulate private investment and close the gap between policy ambition and commercial activity.
This matters for companies comparing markets. A country with significant public support may still have a less mature private innovation base. Another may have a sophisticated mix of tax incentives, grant programmes and corporate R&D activity, but also higher competition and stronger compliance scrutiny.
For CFOs and strategy teams, business participation is a signal. It can indicate how developed the funding system is, how much competition may exist, and how much internal evidence a company will need to present a credible case.
Innovation Orbit 2026 compares markets using several factors, including R&D intensity, ecosystem maturity and business participation.
For companies, this can be translated into a practical investment question: what type of funding environment are we entering?
| Market type | Typical characteristics | Business implication |
| Mature innovation markets | Strong R&D intensity, established incentive systems, significant private-sector activity | Opportunities may be valuable, but competition and compliance standards can be high |
| Public-support-driven markets | Growing policy support, EU or national funding mechanisms, developing private-sector participation | Grants and incentives may help mobilise investment, but rules may need careful interpretation |
| Fast-growing innovation markets | Increasing R&D activity, strong industrial policy, strategic technology focus | Companies may find valuable incentives, but must assess local substance, IP and operational requirements |
| Lower-participation markets | Weaker private R&D contribution or less developed incentive use | Public funding may exist, but companies need to test whether the practical route is viable |
This comparison helps businesses avoid shallow market selection. A headline funding rate or tax benefit is not enough. Companies need to understand whether the wider environment supports delivery, compliance and long-term value.
Governments are directing support towards technologies that affect competitiveness, resilience and future industrial capability. This includes AI, semiconductors, clean technologies, biotechnology, advanced manufacturing, cybersecurity, energy systems and critical materials.
Companies working in these areas may find more funding routes than in the past, but they may also face stricter evidence expectations. Funders want to understand the technical case, market relevance, economic benefit and delivery plan.
Decarbonisation is now a major funding theme across many countries and regions. Public support can apply to clean technology development, industrial emissions reduction, energy efficiency, renewable energy, circular economy projects and low-carbon production.
This creates opportunities outside traditional R&D teams. Sustainability, operations, engineering and finance functions all need to be involved in funding assessment.
Public funding increasingly supports the movement from research into industrial use. Demonstration, pilot lines, production assets, plant modernisation and deployment projects may be eligible under certain schemes.
This matters because many companies struggle to fund the transition from technical development to commercial operation. Public funding can help reduce that gap, provided the project fits the relevant scheme and timing rules.
As incentives become more valuable, authorities are paying closer attention to evidence. Businesses need to demonstrate what work was carried out, why it qualifies, which costs were included and how the project fits the scheme rules.
Weak evidence can reduce the value of a claim or application, even where the underlying activity is strong.
Multinational companies often carry out R&D, engineering, testing, manufacturing and commercialisation across several markets. This can create funding opportunities, but it also increases complexity.
Group structures, intercompany agreements, IP ownership, subcontracting, cost recharges and local activity can all affect eligibility. A country-by-country approach may miss these interactions. A coordinated funding strategy can reduce that risk.
Global funding insight is useful only if it changes business decisions.
Companies should use market intelligence to answer practical questions:
The strongest funding strategies are selective. They focus on projects where the technical substance, commercial value, timing and evidence position justify the effort.
For CFOs, global innovation funding should be treated as part of investment planning, not as a separate administrative process.
The key questions are financial and operational:
A funding opportunity is only valuable if the business can access it, evidence it and manage the obligations attached to it.
FI Group by EPSA helps companies identify, assess and manage innovation funding opportunities across different countries and funding routes.
Our teams support businesses with grant funding, R&D tax incentives, project pipeline reviews, technical documentation, financial evidence, incentive compatibility and compliance management.
For companies operating internationally, a coordinated review can help identify where funding may apply and where early action is needed before investment decisions are finalised.
This article is part of a wider series based on Innovation Orbit 2026, FI Group by EPSA’s global guide to innovation funding.
Download the full guide to compare grants, R&D tax credits and public incentives across Europe, the Americas, Asia and Oceania, and to understand how funding opportunities vary by country, sector and project type.
Download Innovation Orbit 2026
If your organisation is comparing funding opportunities across multiple markets, FI Group by EPSA can help assess which routes are relevant to your project pipeline.
Global innovation funding refers to public support available to companies for R&D, technology development, industrial investment, digital transformation, decarbonisation and related innovation projects across different countries.
Governments are using grants, R&D tax incentives and other public funding routes to attract investment in strategic technologies, clean industry, digital capability and industrial competitiveness. Companies need to understand how these routes affect investment planning.
R&D intensity is a measure of R&D investment relative to the size of an economy. It is often used to compare how strongly countries invest in research and development.
Not necessarily. High R&D intensity can indicate a strong innovation base, but companies also need to assess eligibility rules, funding accessibility, sector fit, business participation, compliance requirements and the practical value of available incentives.
Common routes include R&D tax incentives, direct grants, repayable advances, loans, subsidies, social security reductions, regional investment support and IP-related regimes. Availability varies by country.
Business participation shows the level of private-sector involvement in R&D and innovation. Strong participation can indicate a mature funding environment, while lower participation may mean public incentives are being used to stimulate private investment.
Funding trends can influence where companies place R&D, manufacturing, testing, deployment or scale-up activity. They can also affect project timing, cash flow, compliance requirements and return on investment.
Some funding routes can support CAPEX, particularly where projects involve industrial investment, clean technologies, energy efficiency, digitalisation or advanced manufacturing. Eligibility depends on the country and scheme.
Common risks include weak documentation, incorrect cost treatment, poor project definition, missed pre-approval requirements, grant and tax incentive compatibility issues, and unclear IP or subcontracting arrangements.
You can download Innovation Orbit 2026, FI Group by EPSA’s international guide to grants, R&D tax credits and public funding opportunities across key global markets.
Public incentives increasingly support the full investment lifecycle, from early-stage R&D to CAPEX, digital transformation, decarbonisation and industrial deployment. For companies, this changes how funding should be managed. Grants, R&D tax incentives and wider public funding routes should be assessed before investment decisions are finalised, not after projects are already underway.
The commercial issue is timing. When funding is reviewed early, it can improve project economics, reduce risk and strengthen the investment case. When it is left too late, companies may lose access to grants, weaken their evidence position or miss opportunities to combine incentives effectively.
This article is based on insight from Innovation Orbit 2026, FI Group by EPSA’s international guide to grants, R&D tax credits and public funding opportunities across key global markets.
Download Innovation Orbit 2026
Area |
What companies should understand |
| Funding scope | Public incentives can support R&D, CAPEX, digitalisation, decarbonisation and industrial transformation |
| Investment timing | Many opportunities need to be assessed before costs are committed or project work starts |
| Commercial value | Incentives can affect cash flow, affordability, location decisions and return on investment |
| Operational impact | Funding may require specific evidence, cost tracking, governance and compliance controls |
| Risk | Late assessment can reduce grant eligibility, weaken tax claims or create incentive compatibility issues |
| Best approach | Funding should be integrated into investment planning, not handled as an isolated claim process |
Governments are using public funding to influence investment in areas that matter to long-term competitiveness. That includes R&D, clean technologies, digital transformation, advanced manufacturing, energy efficiency and productive capacity.
This wider scope reflects a practical point: innovation does not stop at research. A company may need to move from technical development into testing, demonstration, equipment investment, production, market deployment and process improvement before the value is realised.
For finance and strategy teams, this means public incentives should be considered across a broader project pipeline. The relevant opportunity may not sit only with the R&D team. It may sit with operations, sustainability, engineering, IT, manufacturing or capital projects.
A full investment lifecycle approach looks at how a project moves from idea to deployment, and where public funding may apply at each stage.
Investment stage |
Typical activity |
Why funding may be relevant |
| Research and technical scoping | Feasibility work, technical uncertainty, experimental development | R&D tax incentives or early-stage grants may apply |
| Development | Product, process, software or technology development | Eligible R&D costs may support tax claims or grant applications |
| Demonstration and pilot activity | Testing, validation, prototypes, pilot lines or trial deployment | Some grants support demonstration and market-readiness activity |
| CAPEX and production investment | Equipment, facilities, process lines or plant modernisation | Certain grant schemes support industrial investment and productive capacity |
| Digital transformation | Automation, data, AI, cybersecurity or enterprise systems | Public funding may support digital capability and technology adoption |
| Decarbonisation | Energy efficiency, clean technologies, emissions reduction or renewable energy | Grants and incentives may support environmental and energy-related investment |
| Skills and operational readiness | Training, workforce development and implementation support | Some programmes include training or capability-building elements |
| Scale-up and international growth | Market expansion, export, cross-border projects or new operating locations | Funding may vary by country, region and project purpose |
The key point is that funding reviews should follow the investment plan. If a company only reviews R&D tax at year end, it may miss grant, CAPEX, energy or international funding routes that required earlier action.
Timing is one of the main reasons companies lose value from public incentives.
Some grants require an application before the project begins. Some programmes require applicants to show a funding need, define the project scope in advance and wait for approval before committing expenditure. If costs have already been incurred, those costs may fall outside the opportunity.
R&D tax incentives can often be assessed retrospectively, depending on the jurisdiction. Even then, timing still matters. Technical evidence, cost records, contracts, project governance and decision logs are easier to capture while the work is happening.
Early assessment allows companies to answer practical questions before the investment is locked in:
These questions are harder to fix after the project has moved into delivery.
CAPEX projects often require significant internal approval. Equipment, facilities, production lines, automation systems and energy assets can affect cash flow for several years. Public funding may improve the investment case, but only if eligibility is assessed early enough.
For example, an industrial investment project may include:
The funding route will depend on the country, region, sector, timing and project purpose. Some support may be delivered through grants. Other support may come through tax incentives, subsidies, loans, social security reductions or IP-related regimes.
This is why CAPEX planning and funding assessment need to be connected. If the business case is prepared without considering public incentives, the company may approve the wrong project structure, miss a deadline or fail to gather the evidence needed to support an application.
Digital transformation can involve software, systems, data, automation, AI, cybersecurity, infrastructure and process change. Some projects include genuine R&D. Others are closer to technology adoption, operational improvement or capital investment.
That distinction matters. Different funding routes may apply depending on whether the project involves technical uncertainty, new capability, productivity improvement, regional investment, training or digital adoption.
A funding review should separate the project into workstreams. For example:
This helps the company assess which elements may qualify for R&D tax incentives, which may fit grant funding, and which are unlikely to be eligible.
Decarbonisation has become a major funding theme in many markets. Companies are investing in energy efficiency, renewable energy, process electrification, emissions reduction, low-carbon production and resource efficiency.
These projects can sit across several departments. Sustainability teams may define the target. Operations teams may design the technical solution. Finance teams may approve the investment. Tax and grants teams may assess incentives.
A full lifecycle approach helps connect these teams early. It also helps distinguish between different types of support, such as:
As explored in Innovation Orbit 2026, public incentives are increasingly being used to support R&D, industrial investment, digital transformation, decarbonisation and strategic technologies. For companies, this makes funding a planning issue as well as a compliance issue.
Read the full Innovation Orbit 2026 guide
A late funding review can reduce value and increase risk.
Common issues include:
These issues are avoidable when funding is built into project planning. They become harder to manage once contracts are signed, budgets are approved and delivery is underway.
A practical approach starts with the investment pipeline.
Companies should review planned activity across R&D, CAPEX, digital, sustainability, manufacturing and international growth. Each project should then be assessed for timing, location, eligible cost categories, evidence requirements and possible incentive interaction.
A structured review should cover:
Question |
Why it matters |
| What is the commercial objective? | Funding should support the investment case, not distort it |
| What technical work is being carried out? | R&D tax and innovation grants often depend on technical substance |
| Where will the work take place? | Eligibility rules vary by country and region |
| When will costs be committed? | Some grants require approval before expenditure starts |
| Which costs are material? | Labour, subcontracting, equipment and overheads may be treated differently |
| Who owns or uses the IP? | Ownership and benefit can affect eligibility |
| Has other public funding been received? | Incentive compatibility and cumulation rules may apply |
| What evidence can be captured now? | Contemporaneous records reduce claim and audit risk |
This type of review helps finance teams make better decisions before the investment case is finalised.
For CFOs, the expansion of public incentives creates both opportunity and responsibility.
The opportunity is commercial. Funding may improve project economics, protect cash flow, support liquidity and make strategically important investment easier to approve.
The responsibility is governance. If incentives are material to the investment case, the business needs a clear process for eligibility assessment, evidence capture, cost tracking and compliance. The company also needs to understand whether funding can be relied on, when it may be received and what obligations come with it.
A mature funding strategy does not chase every available scheme. It identifies the incentives that fit the company’s project pipeline, risk appetite, operating model and investment priorities.
FI Group by EPSA helps companies assess public funding opportunities across the full investment lifecycle, including R&D, CAPEX, digital transformation, decarbonisation and international growth.
Our teams support businesses with project pipeline reviews, funding route assessment, grant applications, R&D tax claims, technical documentation, financial evidence and compliance management across multiple markets.
For companies preparing material investment plans, early review can help identify which incentives are worth pursuing and what needs to be in place before costs are committed.
This article is part of a wider series based on Innovation Orbit 2026, FI Group by EPSA’s global guide to innovation funding.
Download the full guide to compare grants, R&D tax credits and public incentives across Europe, the Americas, Asia and Oceania, and to understand how funding opportunities vary by country, sector and project type.
Download Innovation Orbit 2026
If your organisation is planning R&D, CAPEX, digital transformation or decarbonisation projects, FI Group by EPSA can help assess which funding routes may apply.
The full investment lifecycle covers the stages a project moves through from research and development to demonstration, deployment, CAPEX, operational implementation and scale-up.
Yes, some public funding routes can support capital investment, depending on the country, region, sector, project purpose and scheme rules. CAPEX support is often linked to industrial investment, productivity, energy efficiency, decarbonisation or strategic technologies.
No. Some grants support R&D, but others support feasibility work, demonstration, deployment, equipment, facilities, digital transformation, energy efficiency, decarbonisation, training or regional investment.
Some funding routes require applications or approvals before project work begins or costs are committed. Early assessment also helps companies capture evidence, structure costs correctly and avoid compatibility issues between incentives.
In some cases, yes, but the interaction depends on the country and scheme. Grant-funded costs may need different treatment in an R&D tax claim, so companies should review compatibility before claiming.
Digital transformation projects may involve R&D, technology adoption, process improvement, automation, data infrastructure or training. Different parts of the project may fit different funding routes.
Decarbonisation projects may qualify for grants or incentives where they involve energy efficiency, clean technologies, emissions reduction, renewable energy, industrial transformation or technical development.
Evidence may include project plans, technical reports, cost breakdowns, contracts, invoices, timesheets, board papers, investment cases, procurement records, testing data and proof of project delivery. Requirements vary by scheme.
Late assessment can lead to missed grant deadlines, ineligible costs, weak documentation, poor cost tracking, incentive compatibility issues and project structures that do not support eligibility.
You can download Innovation Orbit 2026, FI Group by EPSA’s international guide to grants, R&D tax credits and public funding opportunities across key global markets.
Innovation funding now affects board-level investment decisions. Grants, R&D tax incentives and public subsidies can influence where companies invest, how they structure projects, how quickly they scale, and how they manage the financial risk of transformation.
For companies planning R&D, CAPEX, digital transformation or decarbonisation projects, public incentives can affect cash flow, timing and return on investment. The value depends on early planning, strong evidence and a clear understanding of how funding rules differ by market.
This article is based on insight from Innovation Orbit 2026, FI Group by EPSA’s international guide to grants, R&D tax credits and public funding opportunities across key global markets.
Download Innovation Orbit 2026
Area |
What businesses should understand |
| Strategic role | Public incentives increasingly support investment decisions, industrial transformation and competitiveness |
| Project scope | Funding can apply beyond traditional R&D, including CAPEX, digitalisation, sustainability and advanced technologies |
| Business impact | Incentives may improve cash flow, reduce project risk and support faster deployment |
| Planning requirement | Eligibility should be assessed before project structures and expenditure decisions are fixed |
| Compliance risk | Rules on evidence, costs, IP, grant compatibility and local requirements vary by country |
| Best approach | Companies should treat funding as part of investment strategy, rather than as a separate claim process |
Governments are using public incentives to compete for high-value investment. This includes support for R&D, productive investment, clean technologies, industrial capacity, digital transformation and strategic technologies.
For businesses, this changes the role of funding. A grant or R&D tax incentive is no longer simply a financial add-on after a project has started. It can influence whether an investment is affordable, where it is located, how it is phased and how quickly it reaches commercial or operational value.
This is particularly relevant for companies with international operations. Different countries use different combinations of tax incentives, grants, loans, social security reductions and IP-related regimes to attract investment. That creates opportunity, but it also increases the need for structured decision-making.
Public funding can affect investment in several practical ways.
A grant, refundable credit or tax incentive may reduce the net cost of an innovation project. This can help a business approve activity that may otherwise be delayed, reduced in scope or deprioritised against other capital demands.
For CFOs, this makes funding relevant to capital allocation. The question is not simply whether a project qualifies. The question is whether public support changes the investment case, timing or risk profile.
Some grants require an application before the project starts. Some tax incentives require technical and financial evidence to be captured while the work is being carried out.
Leaving funding assessment until after costs have been incurred can reduce the available benefit or increase compliance exposure. In some cases, it can remove the opportunity entirely.
Where a company places R&D, production, testing, demonstration or scale-up activity can affect the funding available.
Funding should not drive location decisions in isolation. It should be assessed alongside tax, talent, infrastructure, supply chain, regulation and market access. For international groups, it can form part of the investment model when comparing jurisdictions.
Many companies still view innovation funding through a narrow R&D lens. That approach can miss relevant opportunities.
Public incentives increasingly support the full investment lifecycle. This can include early-stage research, experimental development, demonstration, pilot lines, industrial deployment, plant modernisation, digital transformation, energy efficiency, decarbonisation and advanced manufacturing.
As explored in Innovation Orbit 2026, public incentives are increasingly being used by governments to support R&D, industrial investment, digital transformation, decarbonisation and strategic technologies. For companies, this means funding should be assessed earlier in the investment planning process, rather than treated as a separate claim or application exercise.
Read the full Innovation Orbit 2026 guide
The funding environment is becoming more demanding. Businesses need to manage different rules across jurisdictions, including:
These points can change the value and risk profile of a project. They can also affect how finance, tax, technical and legal teams need to work together.
A technically strong project can still fail to secure support if the evidence is weak, the timing is wrong or the cost base is not properly structured.
Before committing material innovation expenditure, companies should answer five questions.
Businesses should map their project pipeline against potential funding routes. This includes R&D projects, product development, process improvement, technology deployment, decarbonisation, automation and facility investment.
The review should cover active projects and planned projects. The earlier the assessment takes place, the easier it is to identify relevant incentives and prepare the right evidence.
For international groups, the location of activity matters. A project may involve teams, costs, subcontractors and IP across several countries.
Each country may apply different rules to eligible expenditure, local activity, ownership, documentation and timing. A coordinated review can help avoid missed opportunities and duplicated or incompatible claims.
Public bodies and tax authorities increasingly expect clear documentation. Businesses may need records showing the technical challenge, project work, eligible costs, decision-making process and commercial purpose.
The evidence should be practical and contemporaneous. Reconstructing the position after the event can increase internal workload and weaken the claim or application.
Grants, R&D tax credits and other incentives may interact. Some costs may need to be excluded from one claim if support has already been received through another route.
This is particularly important where a business is using regional grants, EU funding, national tax incentives or sector-specific support in parallel.
IP ownership, cost sharing, subcontracting and group arrangements can affect eligibility.
These issues should be reviewed before contracts and project structures are finalised. A funding opportunity can become harder to access if the commercial structure does not align with the requirements of the relevant regime.
A stronger approach starts with governance. Funding should sit across finance, tax, innovation, technical and legal teams, rather than being handled as a narrow administrative task.
Companies should consider:
This approach helps companies identify opportunities earlier and reduce avoidable risk. It also makes funding more useful for senior decision-making.
For CFOs, innovation funding should be considered alongside other investment variables: cash flow, tax, risk, delivery capacity and expected return.
A well-managed funding strategy can support margin, reduce project cost, improve liquidity and strengthen the business case for strategic investment. Poorly managed incentives can create audit exposure, missed opportunities and internal pressure at the point of submission or claim.
The key issue is timing. Funding is easier to manage when eligibility, evidence and compliance are considered before the project begins. Retrospective work may still be possible in some regimes, but it is rarely the strongest approach.
FI Group by EPSA helps companies identify, assess and manage public funding opportunities across grants, R&D tax incentives and wider innovation support mechanisms.
Our teams work with businesses to review project pipelines, assess eligibility, prepare technical and financial documentation, structure applications and support compliance across different markets.
For companies planning R&D, CAPEX, digital transformation or decarbonisation activity, early assessment can help determine which funding routes are worth pursuing and what evidence will be needed.
This article is part of a wider series based on Innovation Orbit 2026, FI Group by EPSA’s global guide to innovation funding.
Download the full guide to compare grants, R&D tax credits and public incentives across Europe, the Americas, Asia and Oceania, and to understand how funding opportunities vary by country, sector and project type.
Download Innovation Orbit 2026
If your organisation is planning innovation-led investment, FI Group by EPSA can help assess where grants, R&D tax incentives or other public funding routes may apply.
Innovation funding refers to public support available for projects involving R&D, technological development, process improvement, industrial investment, digital transformation, decarbonisation or other innovation-led activity. It can include grants, tax credits, loans, subsidies, social security reductions and IP-related regimes.
Innovation funding can affect the cost, timing, location and viability of investment projects. For companies planning significant R&D or transformation activity, incentives may influence cash flow, risk and return on investment.
No. R&D teams play an important role, but innovation funding often affects finance, tax, strategy, operations, sustainability and legal teams. Many incentives now support CAPEX, deployment, digitalisation and industrial transformation as well as traditional R&D.
Grants may reduce the net cost of a project, support investment in new equipment or facilities, and help businesses accelerate activity. Many grants require applications before project work starts, so timing is important.
R&D tax incentives can reduce tax liabilities or, in some regimes, provide payable or refundable benefits. The value depends on the country, company type, eligible activity, cost base and compliance requirements.
In some cases, yes. However, grant funding can affect the costs that may be included in an R&D tax claim. Compatibility rules differ by country and scheme, so companies should assess this before making claims or applications.
Some incentive regimes consider who owns, controls or benefits from the intellectual property created by a project. IP terms, subcontracting and group arrangements can affect whether a company is eligible.
Eligibility should be assessed as early as possible, ideally before project costs are committed. Early review helps companies identify relevant funding routes, prepare evidence and avoid structuring issues.
Companies may need technical records, project plans, cost breakdowns, timesheets, contracts, invoices, financial reports and evidence of uncertainty, advancement or investment purpose. Requirements vary by scheme and country.
You can download Innovation Orbit 2026, FI Group by EPSA’s international guide to grants, R&D tax credits and public funding opportunities across key global markets.
CT600L is the supplementary page companies use with their Company Tax Return when claiming R&D Expenditure Credit, the merged R&D expenditure credit scheme, or an SME/ERIS payable tax credit. It does not prove that a project qualifies for R&D tax relief. Its role is to show HMRC how the credit has been calculated, set against Corporation Tax, restricted by notional tax or PAYE/NIC rules, surrendered, carried forward, offset against other liabilities, or paid to the company.
For finance teams, CT600L is where an R&D tax claim becomes a Corporation Tax filing issue. A technically sound claim can still be delayed or rejected if the supporting forms, figures and CT600 boxes do not align.
Area |
Detail |
| Form | CT600L: Company Tax Return supplementary page for research and development |
| Used for | RDEC, merged scheme expenditure credit, SME payable tax credit and ERIS payable tax credit claims |
| Filed with | CT600 Company Tax Return, usually through Corporation Tax software |
| Current HMRC form | CT600L (2026) Version 3 |
| Accounting period limit | The CT600L period cannot exceed 12 months |
| Separate requirement | The Additional Information Form must be submitted before, or on the same day as, the CT600 |
| Claim notification | Some first-time or infrequent claimants must notify HMRC before claiming |
| Main commercial risk | Incorrect sequencing, weak supporting evidence, PAYE cap errors, inconsistent CT600 figures or group surrender mistakes |
You normally need CT600L where the R&D claim produces an expenditure credit or a payable tax credit. This includes:
You do not use CT600L as the technical report. It is a tax return supplementary page. The underlying claim still needs eligible R&D projects, qualifying cost analysis, competent professional input and a complete Additional Information Form.
Use this checklist before CT600L is submitted:
Done |
Pre-filing check |
| ☐ | Has the company confirmed which R&D relief route applies for the accounting period? |
| ☐ | Has the Additional Information Form been completed and sequenced before the CT600? |
| ☐ | Is a claim notification form required? |
| ☐ | Do the qualifying expenditure figures match the claim methodology and computations? |
| ☐ | Do the CT600L figures reconcile to the CT600 and tax computation? |
| ☐ | Has the PAYE/NIC cap been modelled correctly? |
| ☐ | Have connected company PAYE/NIC figures and employer references been checked? |
| ☐ | Are group surrenders, carried-forward amounts and offsets clearly documented? |
| ☐ | Are bank details included where HMRC needs to make a payment? |
| ☐ | Is the technical evidence strong enough to support the claim if HMRC opens a compliance check? |
A robust R&D claim should usually follow this order:
Boxes L1 to L4 identify the company, tax reference and accounting period covered by the supplementary page. The period cannot exceed 12 months, so long periods of account may need more than one return and more than one set of R&D filing data.
Boxes L5 to L9 deal with Step 2 restrictions brought forward from previous accounting periods and RDEC surrendered from group companies. This section matters where the company has older restricted RDEC amounts or is using credit surrendered by another group company.
Boxes L10 to L45 calculate the amount of RDEC or merged scheme expenditure credit available and the amount used to discharge the current period Corporation Tax liability. This is a key cash flow point. The credit may reduce Corporation Tax before any payable balance is considered.
Boxes L50 to L65 apply the notional tax mechanism. The purpose is to reflect that the expenditure credit is taxable and to limit the payable amount so that loss-making and profit-making companies receive an equivalent post-tax benefit.
Boxes L70 to L80 apply the PAYE/NIC cap for RDEC or merged scheme credits where relevant. This section can be problematic where there are connected companies, externally provided workers, subcontracted work, overseas costs, or short accounting periods.
Boxes L85 to L125 show what happens to any remaining credit. It may be offset against other Corporation Tax liabilities, surrendered to a group member, set against other company liabilities, restricted by going concern or other payment rules, or paid to the company.
Boxes L129 to L165 record credits carried forward to later accounting periods or surrendered within a group. These boxes should be consistent with group computations and any recipient company treatment.
Boxes L166 to L190 cover SME payable tax credit and ERIS-related figures. For accounting periods beginning on or after 1 April 2024, this section is relevant where the company qualifies for enhanced R&D intensive support.
Boxes L194 to L210 summarise R&D amounts used to discharge liabilities in the Company Tax Return. These figures feed into the main CT600, so mismatches between the CT600, CT600L and computations can create filing friction or HMRC questions.
The old RDEC and SME schemes have been replaced by two routes for accounting periods beginning on or after 1 April 2024:
Route |
Broad use |
CT600L relevance |
| Merged R&D expenditure credit scheme | Eligible trading companies claiming a taxable expenditure credit | CT600L is used to calculate and allocate the expenditure credit |
| Enhanced R&D intensive support | Loss-making R&D intensive SMEs meeting the intensity condition | CT600L is used where a payable ERIS credit is claimed |
The merged scheme uses a 20% expenditure credit before tax and restrictions. ERIS allows qualifying loss-making R&D intensive SMEs to claim an additional 86% deduction and a payable credit worth 14.5% of the surrenderable loss, subject to the relevant conditions and caps.
For CFOs, the practical issue is scheme selection. A company may be eligible for ERIS but choose the merged scheme for the same expenditure. It cannot claim both schemes for the same costs. The decision should be modelled before the CT600L is completed.
CT600L affects more than tax compliance. It can affect cash timing, Corporation Tax payments, group cash allocation and the recoverability of the expected credit.
The main commercial risks are:
FI Group by EPSA supports companies with R&D tax relief claims from eligibility assessment through to calculation, documentation and filing support. For CT600L, that means helping finance and tax teams connect the technical claim, cost base, Additional Information Form, computations and CT600L entries into one consistent claim file.
Support can include:
A CT600L review is most useful before the Company Tax Return is filed. At that point, errors in sequencing, scheme selection, PAYE cap treatment and CT600 reconciliation can still be corrected.
What is CT600L?
CT600L is the supplementary page used with a Company Tax Return to report certain R&D tax relief claims. It shows how the R&D expenditure credit or payable tax credit is calculated, restricted, offset, surrendered, carried forward or paid.
Is CT600L required for every R&D tax relief claim?
No. It is generally required where the company is claiming RDEC, the merged scheme expenditure credit, SME payable tax credit, ERIS payable credit, or certain SME RDEC amounts. A claim that only creates an SME additional deduction and no payable credit may not need CT600L.
Is CT600L the same as the Additional Information Form?
No. The Additional Information Form provides project, cost and claim information to HMRC before the claim is made. CT600L is the Corporation Tax supplementary page that records the tax calculation and credit treatment.
Do merged scheme claims use CT600L?
Yes. For accounting periods beginning on or after 1 April 2024, merged scheme expenditure credit claims are reported through the Company Tax Return process, with CT600L used to show the credit calculation and how the credit is applied.
How does CT600L apply to ERIS?
For enhanced R&D intensive support, CT600L is relevant where a loss-making R&D intensive SME is claiming a payable tax credit. The SME/ERIS section records qualifying expenditure, PAYE/NIC cap information and the payable credit position.
What happens if the Additional Information Form is submitted after the CT600?
HMRC can reject the R&D claim. If both forms are submitted on the same day, the Additional Information Form should be submitted first, followed by the CT600.
Can CT600L cover more than 12 months?
No. The CT600L period cannot exceed 12 months. A long period of account may need more than one Corporation Tax accounting period, with claim information split accordingly.
What is the PAYE/NIC cap on CT600L?
The PAYE/NIC cap can restrict the payable element of an R&D credit. For accounting periods beginning on or after 1 April 2024, the cap is generally based on £20,000 plus 300% of relevant PAYE and National Insurance contributions, subject to the detailed rules and exemptions.
Can RDEC be surrendered to a group company?
Yes, where the rules allow it. CT600L includes boxes for RDEC surrendered to a group member, and the computations should include details of the other group company and amount surrendered.
Which CT600 boxes does CT600L feed into?
Important CT600L outputs include payable RDEC, SME/ERIS balance payable tax credit and total R&D set-off against liabilities. These figures feed into the main CT600 and should reconcile with the tax computation.
What evidence should support CT600L?
The company should retain project evidence, competent professional input, cost analysis, apportionment methodology, PAYE/NIC cap calculations, scheme selection rationale, Additional Information Form records and CT600 reconciliation schedules.
The additional investment gives farmers, growers and agri-tech businesses a clearer route to test, validate and scale practical solutions.
UK farming businesses are operating in a difficult commercial environment. Input costs, labour availability, climate pressure, environmental expectations and supply chain volatility are all shaping investment decisions on farm. The underlying need for innovation is clear, but the route from a promising idea to routine adoption remains complex.
The government’s additional £53 million investment into the Farming Innovation Programme is therefore more than a funding announcement. It is a signal that agricultural innovation is being treated as part of a wider productivity, resilience and food security agenda.
For farmers, growers, foresters and agri-tech businesses, the practical question is not simply whether funding is available. It is which route fits the project, whether the evidence is strong enough, and how public funding can reduce risk without creating an unfocused development plan.
The current 2026 funding pipeline includes a mix of facilitator support, on-farm trials, feasibility work and larger collaborative R&D competitions. The main routes are set out below.
| Competition | Key dates | Funding available | Book a meeting |
| ADOPT Facilitator Support Grant: Round 9 | Opened 28 May; closes 8 July | £2,500 to access expert support to prepare a full application | Book ADOPT Facilitator Support Grant meeting |
| ADOPT Full Grant: Round 8 | Opened 4 June; closes 29 July | £50,000 to £200,000 for on-farm innovation projects and trials lasting up to 2 years | Book ADOPT Full Grant meeting |
| ADOPT Facilitator Support Grant: Round 10 | Opens 9 July; closes 19 August | £2,500 to access expert support to prepare a full application | Book ADOPT Facilitator Support Grant meeting |
| Feasibility Studies: Round 5 | Opens 15 July; closes 9 September | £200,000 to £500,000 to test whether an innovation works in practice, with projects lasting up to 2 years | Book Feasibility Studies meeting |
| ADOPT Full Grant: Round 9 | Opens 30 July; closes 23 September | £50,000 to £200,000 to trial and adopt new technologies or practices on farm, with projects lasting up to 2 years | Book ADOPT Full Grant meeting |
| Farming Futures: Automation and Robotics | Opens 3 August; closes 30 September | Funding to support the development of robotics and automation solutions for agriculture | Book Farming Futures Automation and Robotics meeting |
| Small R&D: Round 5 | Opens 1 September; closes 14 October | £1 million to £3 million for collaborative R&D projects to create new products or services, lasting up to 3 years | Book Small R&D meeting |
| ADOPT Full Grant: Round 10 | Opens 24 September; closes 18 November | £50,000 to £200,000 for on-farm innovation projects and trials lasting up to 2 years | Book ADOPT Full Grant meeting |
| Farming Futures: Soils and Water Quality | Winter 2026 | Funding to support technologies and practices that improve soil quality, enhance water management, increase farm profitability and reduce pressure on natural resources | Book Farming Futures Soils and Water Quality meeting |
The Farming Innovation Programme will receive an additional £53 million this year. This takes total investment across the 2026/27 financial year to £123 million, building on the £70 million announced earlier in the year.
Delivered in partnership with Innovate UK, the programme is designed to help farmers, growers and businesses turn new ideas into practical farm-level solutions. It supports innovation across several stages, from early research and development through to on-farm trials and commercial deployment.
This sits within a wider government commitment to invest at least £200 million in agricultural innovation by 2030. It is also aligned with the direction of the Farming Roadmap 2050, which frames innovation as a tool for improving productivity, profitability, sustainability and resilience in English farming.
For businesses, the main implication is that agricultural innovation funding is becoming more structured. The emphasis is moving towards farmer-led testing, adoption, commercialisation and measurable outcomes, rather than research activity for its own sake.
It is helpful to separate the Farming Innovation Programme into four broad routes.
ADOPT Facilitator Support Grants are designed to help farmers, growers and foresters access expert support when preparing a full ADOPT application. The current grant amount is £2,500. This is most relevant where a practical on-farm idea exists, but the applicant needs support to shape the trial design, evidence base and application.
ADOPT Full Grants provide between £50,000 and £200,000 for on-farm innovation projects and trials lasting up to two years. This route is most suitable where the idea is close enough to be tested under real farm conditions, but still carries uncertainty around performance, adoption, cost, practicality or wider sector relevance.
Feasibility Studies sit earlier in the development pathway. They are designed to test whether an innovation works in practice before a company commits to larger-scale development or deployment. This can be useful for agri-tech companies, input developers, technology providers or collaborative teams that need to validate a technical or commercial hypothesis.
Small R&D and Farming Futures competitions are more relevant for collaborative research and development, product development, automation, robotics, soils, water quality and other larger or more technical innovation themes. These routes are likely to suit businesses with clearer development capability, defined work packages and a credible commercial route.
The right route depends on maturity. A farm-led trial, a prototype technology, a microbial input, a robotics platform and a soil management system will not need the same evidence, partnership structure or funding route.
ADOPT is important because it places farmer-led trialling at the centre of the programme. That matters in a sector where adoption risk is often as important as technical risk.
A technology may work in controlled conditions, but still struggle on farm because of cost, labour requirements, integration with machinery, weather dependency, animal welfare, data quality, operator skill or limited confidence from other farmers. ADOPT is intended to close part of that gap by supporting trials and experiments under real farm conditions.
For applicants, this creates a clear discipline. A strong ADOPT proposal needs to show:
This is not just a technical application. It is also an adoption case. Funders need to understand who would use the solution, why they would trust the results, and what would need to be true for the approach to be adopted more widely.
Public funding can reduce risk, but it does not replace commercial viability. This is particularly important in farming, where margins are tight and new technology must usually compete with established processes, machinery, suppliers and routines.
For agri-tech businesses, grant funding should be tied to a defined value inflection point. That may be field validation, customer evidence, regulatory progress, manufacturing readiness, data quality, route-to-market development or private investment leverage.
For farmers and growers, the commercial case may be more operational. A project may need to show how it could reduce input costs, improve labour efficiency, increase yields, improve animal or crop health, reduce emissions, manage water more efficiently, or make better use of on-farm resources.
The strongest projects will usually combine both perspectives. They will show that the innovation is technically credible and commercially relevant, with benefits that can be understood by the farm businesses expected to adopt it.
The government’s examples point to the type of innovation now being prioritised.
The SlurryBugs project addressed a practical nutrient management problem. Slurry can be a valuable fertiliser resource, but ammonia emissions reduce the nutrients available for crop growth. The project developed microbial products designed to help improve slurry quality and retain more of its fertiliser value. The commercial logic is clear: better use of on-farm resources could help reduce reliance on synthetic fertilisers and lower input costs.
The robotic strip cropping project shows a different type of opportunity. It combines precision robotics with mixed cropping to test whether a gantry robot can support one-metre-wide strips of cereals, legumes and companion crops. The project is monitoring yields, crop health and biodiversity, which is important because the value case is not only about automation. It is also about resilience, disease pressure, inputs and whether a more diverse cropping system can be managed at practical scale.
The ENRICH project is focused on nitrogen use efficiency. Nitrogen fertiliser is a major input cost and a significant source of agricultural emissions. By identifying beneficial bacteria that may help wheat plants access and use nitrogen more efficiently, the project is testing whether biological approaches can reduce fertiliser dependency while maintaining productivity.
These examples are useful because they are not abstract. They connect technical development to farm economics, environmental performance and real-world adoption.
Applicants should avoid treating the funding competition as the starting point. A credible project needs to be shaped before the application is written.
The first task is to define the problem clearly. Funders will need to understand whether the issue is primarily technical, commercial, environmental, operational or behavioural. A vague claim that a project will improve productivity will rarely be enough.
The second task is to identify the right evidence. This may include baseline farm data, prior trial results, customer discovery, nutrient analysis, yield data, emissions evidence, machinery performance, labour requirements, cost modelling or adoption barriers.
The third task is to build the right team. Many FIP routes require collaboration. Farmers, growers, foresters, businesses, research organisations, technology providers and facilitators all need defined roles. A consortium should not be assembled only to satisfy eligibility. Each partner should strengthen delivery, evidence or adoption.
The fourth task is to plan the project around milestones. Work packages should be proportionate, measurable and connected to a realistic next step. For a technology business, that might mean investment readiness or commercial demonstration. For a farm business, it might mean deciding whether a practice should be adopted, adapted or rejected.
Finally, applicants need to consider subsidy, tax and cash flow implications early. Grant funding can be valuable, but it can also affect how a project is treated for other support, including R&D tax relief. The finance section should not be left until the end of the application process.
The 2026 funding pipeline is relevant to several groups.
Farmers, growers and foresters should consider ADOPT where they have a practical challenge and a testable idea that could benefit others in the sector. The farmer-led focus is important. These projects need to be grounded in operational reality, not only in supplier claims.
Agri-tech businesses should review Feasibility Studies, Small R&D and Farming Futures opportunities where they need to validate performance, build evidence, develop a product or work with farmers under realistic conditions. This may be particularly relevant in automation, robotics, precision agriculture, nutrient management, soil health, water management, biological inputs and low-emission systems.
Research organisations and universities should look for projects where scientific capability can be translated into practical benefit. The programme is not designed for academic research in isolation. It needs a clear route to farm-level value.
Food and supply chain businesses should also pay attention. Innovation in primary production increasingly affects resilience, scope 3 emissions, water stewardship, traceability, input dependency and long-term supply security. Collaborative projects can help de-risk new approaches before they are embedded into procurement, assurance or supply chain investment.
The additional funding confirms a direction of travel. Agricultural innovation support is becoming more targeted, more commercial and more closely connected to productivity, resilience and environmental outcomes.
For applicants, this creates opportunity, but also raises the standard of evidence. Projects need to show why the innovation is needed, how it will be tested, what risk it reduces, who will adopt it and how it supports a more profitable and resilient farming sector.
The best approach is deliberate sequencing. ADOPT may suit farmer-led experimentation. Feasibility funding may suit early validation. Small R&D and Farming Futures may suit more developed collaborative projects. R&D tax relief and other incentives may support qualifying development activity alongside grant funding, but only where they are planned correctly.
Applying for every open competition is rarely the right strategy. The stronger approach is to map the technical, commercial and financial milestones, then select the funding route that fits the next decision the business needs to make.
FI Group by EPSA can help farmers, agri-tech businesses and innovation-led companies assess their project maturity, structure their funding approach and identify which grant or incentive route fits each stage of development.