Costs guidance for Knowledge Transfer Partnerships
Contents
- Overview
- Calculating your costs
- Project costs for FEC and non-FEC
- Grant rates
- Business partner costs
- Charging VAT for KTP project costs
Overview
This guidance is for knowledge bases applying to a Knowledge Transfer Partnership (KTP) competition. As part of your application, we will ask for all of your costs.
It is the responsibility of the knowledge base to ensure this information is supplied along with indications of additional business contributions, which must also be entered on the application. Incomplete or inaccurate submissions may be withdrawn from the competition.
Knowledge Bases submit their costs based on either:
· full economic costing (FEC) cost categories
Ensuring accurate information
It is important that you provide accurate and complete information
in your application. Errors may result in your project being rejected or
withdrawn from the competition. Once an application has been submitted, it
cannot be amended.
To be eligible for reimbursement, all requested items must comply with the detailed guidance. Innovate UK will not reimburse any costs claimed for items that fall outside these requirements.
If you discover an error after submitting your application, you must contact Innovate UK Customer Support immediately. Innovate UK may also contact you to clarify or verify the information you have provided.
Managing the budget
The
knowledge base is responsible for managing the budget and submitting claims.
The business will pay the knowledge base directly for their share of the total
project costs.
The KTP programme will establish a Local Management Committee for your partnership, which will control the costs according to the grant offer letter. Claims will be submitted on a quarterly basis by the Knowledge Base. As Innovate UK’s representative on the LMC, the Knowledge Transfer Adviser for your project must approve all claims.
Calculating your costs
Once you have established what your project is trying to achieve, you’ll need to set out the tasks and stages in a workplan. This will allow you to understand which individual costs you can claim.
Where possible you should cross-reference the costs requested to the workplan that you will submit as part of your application. This will help Innovate UK understand where costs occur within the project.
The total eligible costs for a KTP project depend on several parameters:
- duration
- the nature of the work to be undertaken
- geographical location of the business partner or the project
- costs of the knowledge base
- if you are a virtual business
- where the associate will work
Your
project must include the costs for:
- employing the associate
- the knowledge base supervisor
- any laboratory or office space used by the associate
- additional associate
support
Knowledge base costs are calculated according to formulas which are often linked to the full economic costing (FEC) methodology.
Businesses should discuss with their chosen knowledge base which funding methodology it uses. Businesses should also note that costs can vary significantly between knowledge bases.
Project costs for FEC and non-FEC
There are two costing methodologies used by knowledge bases:
- FEC (full economic costing method) is typically used by higher education institutions
- non-FEC (standard costing method) is used by further education colleges, research and technology organisations (RTOs) and some Catapults
Budgets within an application are a request for funding and will be scrutinised. The KTP programme management reserves the right to decline or amend any request that does not conform with this guidance.
Applicants are reminded that to be eligible for reimbursement, all requested items must comply with the detailed guidance. Innovate UK will not reimburse any costs claimed for items that fall outside these requirements.
Where stated in the detailed guidance, applicants may request funding in excess of the limits shown; however, a clear and robust justification for the total amount requested must be provided. This justification must demonstrate why the additional costs are necessary to deliver the project and align with the workplan. Details must be included in the “Do your project costs exceed the allowed limit?” section of the application form.
There is a maximum cost for the associate salary which Innovate UK will not exceed, but the businesses can top up salaries that go over this limit. This must be declared as an additional business contribution.
Cost overview for 12-month project
You must calculate the figures for your project in whole months, on a pro rata basis. Below are the costs for a project that lasts 12 months:
- associate employment costs: £60,000 if based within 16 miles of Charing Cross, London, or £63,000 if based more than 16 miles away
- academic and secretarial support (not applicable for FEC costing): £20,000
- associate development: £2,500
- travel and subsistence: £2,000
- consumables: £3,000
- knowledge base supervisor (not applicable for non-FEC costing): variable amount
- estate costs (see consumables section for non-FEC costing): £5,000
- additional associate support (not applicable for non-FEC costing): variable amount
- overheads of the knowledge base partner and direct staff costs, including knowledge base supervisor (not applicable for FEC costing): 46% of associate employment costs and academic and secretarial support at prevailing grant rate
Grant rates
Once you have established the total cost of the project, partners must determine the correct grant rate to apply for. Grant rates vary depending on the size and type of the business and if the knowledge base uses FEC or non-FEC to calculate its costs.
Innovate UK grant rate contributions are:
- large businesses and public sector organisations: 50%
- micro, small and medium-sized businesses: 67% for FEC projects, 60% for non-FEC projects
The grant rate applied for should reflect the size of the business partner or group on the date that the application is submitted.
You can find guidance on determining the size and type of business in the eligibility section of the application. If your business is part of a group, this will impact on the grant rate as it will be calculated based on the total size of the group.
If your application is successful, Innovate UK will provide the knowledge base with a grant to cover a proportion of the total project costs. The businesses will need to fund the remaining cost of the project.
Welsh Government Support
We work with Welsh Government to support a range of projects.
SME’s based in Wales can request a grant rate of 75%. Should Welsh Government decline to offer their funding, IUK may offer the project the standard 67% grant rate.
Projects between Welsh Universities and Welsh based social enterprises, co-operatives, charities or charitable businesses may request to be fully funded by Welsh Government.
· social enterprises, co-operatives, charities or charitable business with 499 or fewer employees (FTE) may receive a grant contribution of up to 75% of eligible project costs.
· over 500 (FTE) will receive a grant contribution of up to 50% of eligible project costs.
If Welsh Government decline to offer funding, projects will be withdrawn from the competition.
Business partner costs
The business partner must cover their share of the project costs, along with other costs such as supervising the associate and supporting the delivery of the project. They will need to include within the application an explanation of how additional costs will be funded.
The business partner will also be required to support additional costs incurred through hybrid working, such as home office equipment and software licences.
Virtual businesses must also cover the additional costs of running the KTP within the virtual business environment.
Additional costs for virtual businesses must be included on the application form in the ‘additional business costs estimates’ section, which includes:
- meeting rooms
- some associate travel
- office equipment
- business software licences required for homeworking
Equipment for homeworking must satisfy the requirements of the knowledge base.
Charging VAT for KTP project costs
Innovate UK VAT policy
Innovate UK’s position on VAT eligibility is set out within our published guidance. Responsibility for determining whether VAT is recoverable or irrecoverable rests with the grant recipient, based on their individual circumstances and, where necessary, discussions with HMRC. Innovate UK does not make determinations regarding VAT recovery status, as this is a matter between the organisation and HMRC.
Where an applicant considers VAT to be irrecoverable and wishes to include it as an eligible project cost, this should be identified and incorporated into the project costs and funding request during the application and award set-up process. The grant award is then agreed based on those approved costs at the start of the project.
As a matter of policy, Innovate UK does not hold contingency funding to accommodate subsequent increases in project costs or grant requests arising from a later reassessment of VAT treatment. Therefore, confirmation from HMRC that VAT is irrecoverable does not create an entitlement to additional grant funding where those costs were not included within the approved project costs and grant award.
Our position is that the introduction of VAT costs at this stage would not result in an increase to the approved grant award, regardless of whether those costs are now considered irrecoverable. Should VAT be accepted as an eligible project cost within the existing project budget ( and if we receive confirmation from HMRC or a formal letter or statement from your independent accountant or finance director explicitly confirming that the VAT on grant-funded expenditures cannot be reclaimed from HMRC), any such costs would need to be accommodated through corresponding cost savings elsewhere in the project that do not adversely affect the agreed scope, objectives, or delivery of the project. Please send this information to ktpqueries@iuk.ukri.org
Retrospective claims are not accepted.
For queries regarding how this guidance impacts your knowledge base please contact grants_services@iuk.ukri.org
No comments:
Post a Comment