Innovate UK, the UK’s national innovation agency provides grants to support innovative projects undertaken by businesses and researchers. Securing one of these grants can significantly advance your project. However, it’s crucial to understand which costs are eligible to optimise your funding and maintain compliance. Below is a short guide to the eligible costs for Innovate UK grants.

Labour Cost

Labour expenses form a major component of many projects. Innovate UK grants cover the salaries of personnel actively engaged in the project, such as researchers, engineers, and project managers. Eligible costs include gross salaries, employer’s national insurance contributions, and pension contributions, proportionate to the time spent on the project.

• Must be actively engaged in the project.
• Costs include gross salary, national insurance, and pension contributions.
• Eligible for both part-time and full-time staff, based on their involvement in the project.

Overheads

Overhead costs, or indirect costs, are necessary to support the project but are not tied to a specific project activity. Innovate UK uses a simplified method to calculate overheads, Typically, a fixed percentage of the labor costs is charged. The standard option is 20%, allowing you to claim 20% of your labour costs as overhead.

• Calculated as a percentage of labour costs.
• Includes general operational costs like utilities, office space, and administration.

Materials Costs

This includes consumables directly used in the project, such as raw materials, components, and assemblies needed for prototyping, testing, and development.

• Must be exclusively used for the project.
• Includes raw materials, components, and consumables.

Capital Equipment Costs

Costs related to the purchase or usage of essential equipment for the project. Innovate UK usually covers the depreciation of such equipment over the project duration, rather than the full purchase price.

• Eligible costs are depreciation during the project.
• Equipment must be primarily used for the project.

Subcontracting Costs

These are costs for services provided by third parties, which include expertise or services not present internally, such as consulting, specialist testing services, and manufacturing.

• Subcontractors must provide specific expertise or capabilities.
• Must be necessary and justified within the project’s scope.

Travel and Subsistence Costs

These cover expenses for travel, accommodation, and subsistence when staff travel for project-related activities, including meetings, conferences, or fieldwork.

• Must be related to the project.
• Includes travel, accommodation, and subsistence expenses.

Other Costs

Miscellaneous costs that may be eligible, depending on the project’s specifics, could include patent filing fees, costs for regulatory approvals, and dissemination expenses (e.g., publication and conference fees).

• Must be directly related to the project.
• Includes costs like patent filings and regulatory approvals.

Compliance and Reporting

Maintaining accurate records of all expenditures is vital for compliance. Innovate UK mandates detailed financial reports and audits to confirm the eligibility of claimed costs. Robust record-keeping simplifies this process and prevents issues during audits. Tips for Compliance:

• Maintain detailed records of all project-related expenses.
• Ensure all costs are necessary, reasonable, and directly related to the project.
• Regularly update and review financial reports for accuracy.

Conclusion

Understanding and accurately identifying eligible costs for Innovate UK grants is key to effective project management and compliance. Staying informed of the latest Innovate UK guidelines is crucial, as they can change. For further detailed guidance and support, consider consulting a professional specialising in grant applications and project management. Properly leveraged, Innovate UK grants can significantly propel your innovation efforts. Explore our Grants Knowledgehub resources for more information on grants, Whether you’re a start-up with a passion for innovation, a growing business that has turned an idea into reality, or an SME ready to make a bigger impact, grants can be the key to unlocking your dream project. Our knowledge hub covers a wide range of topics related to grants, from eligibility to guidance after winning a grant.

Contact Us

If you’re interested in exploring whether grants are suitable for your business and wish to discover the available options, please reach out to our grants team below or learn more about the tailored Grants services we provide.