Funding landscape
Building an Innovate UK project budget: intervention rates and match funding explained
Direct costs, overheads, subcontractors and match funding. What a credible Innovate UK budget looks like, and how intervention rates change what you can claim.
The budget is a technical document
Applicants often treat the budget as an administrative afterthought completed the night before submission. Assessors and Innovate UK monitoring officers read it as evidence of whether you understand the work you have proposed.
If the project plan describes twelve months of prototype development and the budget funds a fraction of an engineer, the mismatch is obvious and it undermines everything above it.
Intervention rates and what they mean for you
Innovate UK does not fund 100% of eligible project costs. The proportion it will fund, the intervention rate, depends on the type of research and the size of your organisation. Micro and small businesses can typically claim up to 70% of eligible costs for feasibility studies and industrial research, while medium-sized businesses and large businesses receive lower rates.
The remainder must come from your own resources, known as match funding. This can be cash, but it can also be the value of staff time and other resources your organisation contributes to the project. Build match funding into your plan from the outset rather than treating it as a formality.
Where the money usually goes
Staff costs are normally the largest line, calculated from actual salary and a permitted overhead rate rather than an invented day rate. Named individuals with a defined role and time commitment are far more credible than generic full-time-equivalent numbers.
Materials, equipment, travel and subsistence, and subcontractor costs follow. Capital equipment is treated cautiously; where possible, using a facility or renting equipment time is easier to justify than a full purchase, unless the equipment is core to the innovation itself.
Subcontractors, collaboration and the work split
On collaborative projects, the grant funding rules and the intervention rate apply per organisation, based on that organisation's size and the type of research it is carrying out. Get the cost split agreed with your partners before you submit, not after the offer is made.
Subcontractor costs need a clear justification tied to a specific project activity. A subcontractor performing a defined, bounded piece of work is persuasive; a vague allocation of budget to an unnamed third party is not.
Overheads and the questions they raise
Most applicants use a standard overhead rate applied to staff costs rather than calculating a bespoke rate, and this is normal and expected for smaller organisations. Only use a calculated rate if you can defend it with your own finance records.
Every unusual line item needs a sentence of justification that ties back to a project objective. If an assessor or monitoring officer has to guess why a cost exists, it will read as padding and may be queried or reduced at the offer stage.
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