Financial and tax incentives
Want to bring your project to life? Think Scotland. Benefit from a range of attractive incentives to help you upskill your staff, develop new products and services and access growth capital.
Funding, grants and support
The way we support businesses in Scotland is changing. We’re putting in place a simpler, more inclusive funding model that will help support investors, create jobs and a greener economy.
This model will be launched from the end of February 2021, with grant funding targeted towards projects that will help generate jobs and support Scotland’s ambitions for a low carbon economy.
Tax relief and incentives
If you’re investing in certain companies, social enterprises or venture capital trusts in Scotland, you may be eligible for tax relief from several schemes. If you’re thinking of running a business here, these schemes can make your company more attractive to investors.
Enterprise Investment Scheme (EIS)
If you’re investing in an established Scottish company, the Enterprise Investment Scheme can help you get tax relief on your shares.
If you’re thinking of locating your business in Scotland, you can take advantage of the EIS to attract new investors. You can raise up to £5 million each year using EIS, and a maximum of £12 million in the company’s lifetime. There are some rules around what you can use the funds for and when you need to use it.
More on Enterprise Investment Scheme on gov.uk
Seed Enterprise Investment Scheme (SEIS)
If you’re investing in a seed enterprise that’s less than two years old, the Seed Enterprise Investment Scheme (SEIS) can help you get a tax relief on your shares.
On the other hand, if you’re thinking of establishing a seed enterprise or start-up in Scotland, you can use the SEIS to help you attract investors and get trading.
More on Seed Enterprise Investment Scheme on gov.uk
Social Investment Tax Relief (SITR)
The Social Investment Tax Relief (SITR) scheme can be used by social enterprises like a charity, community interest company or community benefit society. If you invest in a social enterprise that uses SITR, you’ll get a tax relief on your shares.
If you’re thinking of moving your social enterprise to Scotland, rather than investing in one, you can use the SITR scheme to help you attract new investors.
More on Social Investment Tax Relief on gov.uk
Venture Capital Trust (VCT)
You can also invest shares in a VCT and enjoy a number of tax relief incentives. A VCT is a company (like an investment trust) that’s been approved by HMRC and invests in, or lends money to, unlisted companies.
This tax relief scheme helps you reduce the amount of income tax you pay on subscription and dividends, as well as capital gains tax.
Scotland is a great place for R&D and it offers generous incentives for businesses working on innovation projects.
The Patent Box
Under the Patent Box tax relief scheme, companies can claim a lower tax rate for profits that come from patented inventions. You’ll pay 10% corporation tax rather than the usual 19%. You can benefit from this incentive if your company owns or exclusively licenses-in patents granted by the UK Intellectual Property Office or the European Patent Office, as well as a number of countries in the European Economic Area.
More on the Patent Box on gov.uk
Small and medium sized enterprises (SME) R&D Relief
If you’ve got an SME based in Scotland, you can take advantage of this relief scheme. Under the scheme, you can deduct qualifying costs from your yearly profit, and also claim a tax credit if you’re making a loss.
More on SME R&D Relief on gov.uk
Research and Development Expenditure Credit
This tax incentive is mostly used by large companies, but it can also be used by SMEs which are being contracted to work on R&D projects by a large company. The credit is calculated as a percentage of your company’s qualifying R&D expenditure and is subject to corporation tax. Qualifying expenditure can include things like staff costs, materials and subcontractor costs.
Companies in the creative sector can take advantage of a number of UK-wide tax relief schemes for the creative industries.
If you’re involved in the development or production of British films, high-end TV programmes, children’s TV programmes, animation programmes, video games, theatre productions, orchestral concerts or museum and art gallery exhibitions, you could be eligible. These schemes offer tax deductions on certain types of expenditure.
Investing in a green, sustainable future
The Scottish National Investment Bank, the UK’s first mission-led development bank, has officially opened for business, backed by £2 billion from the Scottish Government over ten years.
The Bank will fund what matters most to Scotland for a greener, sustainable future, helping transform our wellbeing, spaces and economy.
At launch, the Bank completed its first major investment of £12.5 million in Glasgow-based laser and quantum technology firm M Squared Lasers to support the company’s further growth in Scotland.
Pictured: Trade & Investment Minister Ivan McKee with Dr Graeme Malcolm CEO and founder of M Squared at the company's Glasgow lab in July 2019.
"Science and advanced technologies have a major role to play in Scotland’s future economic prosperity. By increasing investment in research and development with a mission-based approach, Scotland has a real opportunity to actively tackle climate change and benefit from the coming quantum revolution."
Dr Graeme Malcolm, CEO and founder of M Squared
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Scotland's Investment Ready Incentives (PDF, 1.2MB)
Got a question about finance or incentives to set up and grow your business in Scotland? Talk to our advisers.