Key takeaways

  • Innovate UK is the UK's innovation agency, part of UKRI, and funds UK-based businesses and research organisations through competitions on the Innovation Funding Service.
  • Innovate UK Smart grants are closed to new applications while funding is aligned to its new strategic direction.
  • From autumn 2027, all Innovate UK support will be offered through Velocity, a long-term support model for high-potential businesses.
  • Innovate UK focuses on six priority sectors: advanced manufacturing, clean energy, creative industries, defence, digital and technologies, and life sciences.
  • Minimal Financial Assistance under the Subsidy Control Act 2022 is capped at £315,000 per organisation over a rolling three years.
  • In a collaborative project, no single partner can account for more than 70% of eligible costs.
  • Open now: DRIVE35 Scale-up Fund Drawdown 6 offers up to £150 million in grants and closes on 27 January 2027.

Innovate UK grants fund research and development projects by UK businesses, awarded through competitions you apply for on the Innovation Funding Service. Each competition sets its own scope, budget and funding rate. In November 2026 the open-to-any-sector Smart grants are closed, and Innovate UK is moving all its support into a new model, Velocity, from autumn 2027.

What is Innovate UK?

Innovate UK is the UK’s innovation agency and part of UK Research and Innovation (UKRI). UKRI says it backs deep tech businesses in the UK’s priority sectors with funding, expert support and connections.

Its strategy page, updated 20 July 2026, lists six priority sectors aligned with the Industrial Strategy:

  • advanced manufacturing
  • clean energy
  • creative industries
  • defence
  • digital and technologies
  • life sciences

If your project sits outside these sectors, expect fewer opportunities.

What does Innovate UK fund?

Innovate UK funds research and development of new products, processes and services, testing of innovation ideas, and collaboration with other organisations. It offers several routes:

RouteWhat it is
GrantsCompetition funding towards eligible project costs
Innovation loansLoans for SMEs doing late-stage R&D close to market
Knowledge Transfer PartnershipsFunded partnerships with academics and researchers
Investor partnershipsGrant funding paired with private equity investment
Contracts for InnovationFunded procurement contracts with government bodies

The research categories are fundamental research, feasibility studies, industrial research and experimental development. Each competition’s scope sets which category applies, and with it the share of costs Innovate UK will pay.

Are Smart grants still open?

No. Innovate UK’s guidance for specific funds says Smart grants are closed to new applications while funding is aligned to its new strategic direction.

What is Velocity?

Velocity is Innovate UK’s new model, opening to applications in autumn 2027. It moves away from grants for one-off projects towards long-term support: funding, growth coaching, investor connections and international opportunities through a single application. Innovate UK says all its support will be offered through Velocity when it launches. It has not published funding amounts.

Who can apply?

You can apply if you are a UK-based business or research organisation, according to GOV.UK. Innovation loans are for UK micro, small and medium-sized enterprises only.

Every applicant goes through financial viability and eligibility checks. Organisations in financial difficulty cannot receive funding.

How much can you get?

The amount depends on the competition. Innovate UK’s funding rules say business funding rates depend on your size, type and role in the project, and the competition brief gives the exact percentages. You fund the rest yourself.

Limits that apply across competitions:

  • In a collaborative project, one partner cannot account for more than 70% of eligible costs.
  • Minimal Financial Assistance is capped at £315,000 per organisation over a rolling three years, under the Subsidy Control Act 2022.
  • Innovate UK can withhold a grant payment if you owe it money on another project.

How to apply for an Innovate UK grant

  1. Find a competition. Search the UKRI funding finder or the Innovation Funding Service for open opportunities in your sector.
  2. Read the competition brief. Check the scope, eligibility, funding rate, project size and closing date.
  3. Confirm your match funding. Work out how you will pay your share of costs.
  4. Create your application on the Innovation Funding Service and add any partners.
  5. Answer the application questions and complete the finance forms and project impact questions.
  6. Submit before the deadline. Late applications are not accepted.

Our grant application tips cover how to write each section.

What is open now?

Two Innovate UK opportunities were listed on UKRI’s site on 6 November 2026:

  • DRIVE35: Scale-up Fund Drawdown 6. Up to £150 million in grants for scale-up manufacturing of zero emission vehicle technologies. Opened 4 November 2026, closes 27 January 2027.
  • Wearables and observables: home learning environment. £3.57 million in total, with awards of £500,000 to £900,000. Opens 17 November 2026, closes 19 January 2027.

Which applies to you?

  • If you work in a priority sector with a defined R&D project, look for a themed competition now.
  • If your project is close to market and you can take on debt, consider an innovation loan.
  • If you need research expertise, a Knowledge Transfer Partnership may fit.
  • If you are outside the priority sectors, look at other government grants for small businesses and SEIS and EIS investment.

What to do now

  1. Sign up for Innovate UK emails to hear about Velocity.
  2. Keep R&D cost records; they also support an R&D tax relief claim.
  3. Check your subsidy history for the last three years before applying.

Frequently asked questions

Are Innovate UK grants free money?

They do not have to be repaid if you meet the terms, but you usually fund part of the project costs yourself. Innovation loans must be repaid.

Can a sole trader apply for Innovate UK funding?

GOV.UK says UK-based businesses can apply. Check each competition brief, as eligibility rules vary.

When will Smart grants reopen?

Innovate UK has not said. Smart grants are closed, and all support is due to move to Velocity from autumn 2027.

How do I apply for Innovate UK funding?

Find a competition through the UKRI funding finder, read the brief, then apply on the Innovation Funding Service before the closing date.

Sources

Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 6 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.