Applications for grants from the £375 million Future Fund: Breakthrough have opened. Not to be confused with an earlier 'Future Fund', this scheme is aimed at helping Research & Development (R & D) intensive companies bring new technologies to market.
The scheme was announced in Budget 2021 and is regarded as part of the government's Plan for Growth. An earlier Future Fund, introduced in March 2020 and which provided £1 billion of convertible loans to high-growth businesses, has now ended.
The scheme will be overseen by the British Business Bank's subsidiary, British Patient Capital and will be open for applications on a rolling basis. It has strict eligibility criteria.
- Applications must be made by lead investors, not companies. The lead investor does not have to be the largest investor in the round but is expected to contribute a significant amount to the investment round and meet the lead investor criteria.
- Grants will be focused on R&D intensive companies. R&D should be done in the UK.
- R&D spending (as defined by pre-set accounting rules) will have been at least 10% of the total operational cost base on average over the last three years or at least 15% in one of the past three years.
- The company is developing defensible intellectual property in the UK which they expect to be the company’s main revenue source.
- The company intends that 20% or more Employees will be carrying out research for at least three years from the date of investment, in roles that require a relevant master’s degree or higher.
- There must be a minimum total investment round size of £30m.
- Businesses must have commitments of 70% of an investment round from private investors with a track record of financing innovative companies, such as venture capitalists.
- Companies must have raised at least £5m in previous funding rounds.
- Companies must be UK based (UK incorporated) with significant UK operations (meaning at least half of its overall employment base and research employees are based in the UK).
- Under the rules for the Future Fund: Breakthrough. lead investors will be asked to sign the Treasury’s Investing in Women Code, which commits firms to improving female entrepreneurs access to tools, resources and finance.
The Future Fund: Breakthrough is intended to accelerate the deployment of breakthrough innovations in areas such as life sciences, quantum computing and clean technology.
Useful guides on this topic
R & D & Patent Box
Find out all about Research & Development and Patent Box tax reliefs. R&D guides (subscribers) and answers to FAQs.
R&D Tax Relief: Overview
What is R&D Relief? How does it work? Why does the size of the company matter? What is sub-contracted R&D? How do I write an R&D Report?
R&D: 'Large Company' Scheme (RDEC) Guide
What is the R&D Expenditure Credit (RDEC) Large Company Scheme for R&D relief? How does it work?
R&D: Staff costs, subcontractors & reimbursed expenses
What staff costs qualify for relief? Who are externally provided workers? Can you claim sub-contractor costs? Do reimbursed employee costs qualify?
COVID-19: Loan funding
COVID-19: different types of loan funding. All loan funding is repayable.
External links
British Patient Capital; Future Fund: Breakthrough
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