Manufacturing companies: Financial incentives for relocating to UK

For manufacturing companies seeking stability, support for innovation and strategic market access, the UK is a compelling proposition. The UK government’s pro-growth agenda, coupled with a suite of fiscal incentives, makes it an attractive destination for manufacturing businesses considering relocation or expansion.

Here, we explore the UK’s competitive edge through financial invectives such as R&D tax credits, Industrial Strategy zones, freeports, Patent Box regime and access to UK and EU grants.

Financial incentives: UK and EU grants

UK-based businesses remain eligible for a range of UK Research and Innovation, and Innovate UK grants, plus other grant competitions for specific technologies (AI, electric vehicles) or sectors (defence, life sciences). Furthermore, through the Horizon Europe programme (rejoined in 2024), UK companies can, despite Brexit, access EU research funding, promoting cross-border collaboration and innovation.

Industrial Strategy zones and freeports: Regional financial incentives

The UK has designated 22 Industrial Strategy zones across England, Scotland, Wales and Northern Ireland. The zones are strategically positioned to stimulate regional economies and attract high-growth sectors.

They offer:

• 100% relief on business rates for ten years;
• enhanced capital allowances;
• employer NIC relief for new employees;
• streamlined planning processes.

Furthermore, the UK’s 12 freeports provide customs and tax advantages, including duty deferral and VAT suspension, which makes them ideal for manufacturing and logistics operations.

R&D credits: Incentivising scientific and technical projects

The UK has two primary schemes:

• R&D Development Expenditure Credit (RDEC) scheme: available to all companies, offering a tax credit of up to 16p per £1 of qualifying R&D spend.
• Enhanced R&D Intensive Support (ERIS): targeted at loss-making SMEs with R&D expenditure exceeding 30% of total costs, offering relief of up to 27p per £1.

Crucially, companies can now claim R&D tax relief even when projects are grant-funded, simplifying access to public funding and tax incentives.

Patent Box: Financial incentives for commercialising innovation

The UK Patent Box regime allows companies to apply a reduced 10% corporation tax rate on profits generated from patented inventions and certain other innovations. The current rate is 25%, so this is potentially a significant saving. This incentive is particularly appealing for businesses in pharmaceuticals, engineering and software, fostering not only R&D but also the retention of IP and manufacturing within the UK.

Practical advantages beyond financials

Besides financial incentives, the UK has additional beneficial strategic factors, including:

• a rich talent pool in science, technology, engineering and mathematics;
• legal and regulatory frameworks that are transparent and business-friendly;
• a time zone that connects US and Asian markets;
• advanced infrastructure, digital connectivity and access to capital markets.

Moore R&D’s expertise

The UK government’s growth agenda emphasises innovation, regional development and foreign direct investment, with targeted incentives to attract high-value sectors such as advanced manufacturing, life sciences and green energy technology.

Understanding the full range of available support and aligning it with your business strategy is key to maximising value. Contact us at Moore R&D, your trusted and experienced innovation partner, to ensure you locate your manufacturing innovation activities in the best place.