Example: A UK manufacturer budgeted £120,000 for a Dynamics 365 roll-out. By combining an Innovate UK grant with R&D tax relief, their net cost dropped by £35,000. That saving allowed them to add modules they would otherwise have postponed.

What grants are available for Dynamics 365 projects?

Grants are a strong way to reduce upfront costs. In the UK, they usually come from:

Innovate UK – supports digital transformation and technology adoption
Local Growth Hubs – region-specific funding for SMEs
Sector-specific funds – for industries such as manufacturing, healthcare, or green tech

What they cover

A percentage of your project costs (typically 20–50%)
Often focused on innovation, efficiency, or digital adoption
Usually require an application with a clear business case

Pros

Reduces the initial cash outlay
Can make a project affordable that would otherwise be shelved

Cons

Competitive application process
Strict eligibility criteria
Timescales may not match your project deadlines

Tip: If you are considering a grant, start the process early. Many schemes require detailed plans, evidence of innovation, and sometimes a consortium of partners.

R&D tax relief for Dynamics 365

R&D tax relief is one of the most underused funding routes for technology projects in the UK.

Who qualifies?

Businesses creating new systems or significantly improving existing ones
Projects that involve technical uncertainty (not just “off-the-shelf” installs)

What you can claim back

Staff costs
Subcontractor and consultant fees
Software and cloud licences
Testing and development expenses

How it works

You complete your project
You submit an R&D claim with your corporation tax return
HMRC either reduces your tax bill or provides a cash repayment

Typical benefit: Up to 25% of eligible spend.

Combining grants and R&D tax relief

You are not limited to choosing one option. Many businesses successfully combine both.

Step 1: Secure a grant to reduce upfront costs
Step 2: Use R&D tax relief to claim back part of the remaining spend

Example:

Project cost: £100,000
Innovate UK grant covers £30,000
Remaining £70,000 qualifies for R&D tax relief
Claim back up to £17,500
Net cost: £52,500

This approach can nearly halve the true cost of a Dynamics 365 project.

Pitfalls to avoid

Funding is powerful, but it is not without challenges. Common issues include:

Assuming all costs qualify – licences and routine implementation often do not
Missing deadlines – grant calls close quickly, and R&D claims have strict cut-off dates
Weak applications – grant assessors want detail, not vague promises
Poor record keeping – HMRC may ask for evidence of time and costs

Pro tip: Work with advisers who have secured funding for similar projects. Their experience can make the difference between a successful application and a wasted effort.

Step-by-step funding checklist

Step 1: Work out your budget

Get a ballpark figure for what you can afford.
Include licences, setup, training, and ongoing support.
Don’t forget internal costs like staff time and resources as they add up fast.

Step 2: Speak to a Dynamics partner

A partner will help you scope things properly.
You’ll get a realistic view of what’s possible within your budget.
Ask them directly about funding options as good partners keep up with what’s available.

Step 3: Check R&D tax relief eligibility

Speak with your accountant or tax adviser.
If your project involves solving technical challenges or building something new, you may qualify.
Even after the project is complete, you could claim back a chunk of the cost.

Step 4: Look into grants

Search local, regional, and national business grant schemes.
Focus on funds that support digital transformation or innovation.
Your Dynamics partner may already know the best ones for your industry.

Step 5: Plan for funding applications

Some grants take weeks or months to process remember to factor that into your timeline.
Be ready to write a short proposal or business case.
Keep it straightforward: outline what you want to achieve and why it matters.

Step 6: Decide how to move forward

If funding is approved, brilliant, now you can roll out with confidence.
If not, consider starting smaller with a phased rollout.
You can always expand once you prove value.

Next steps

If cost is holding back your Dynamics 365 project, do not write it off. Explore:

Grants – check Innovate UK, your local growth hub, and sector-specific schemes
R&D tax relief – review whether your project has elements of technical innovation
Combined approach – add the two together for maximum saving

With the right mix, you can cut tens of thousands off your project cost and bring transformation forward, not delay it.

Mark’s serious when he says you can get a system for free, and it’s really not that difficult.

Here are a couple of links to get you started…

Find Your Local LEP
https://www.lepnetwork.net/about-leps/the-38-leps/

Information about Research and Development Tax Relief
https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief

FAQs

Can I get a grant and claim R&D tax relief?
Yes, many businesses do. But you’ll need to structure it properly. Some grants affect what you can claim, so speak to an adviser.
Where do I find UK grants?
Start with your local Growth Hub, Chamber of Commerce, or the Find a Grant service. Sector-specific schemes are also worth exploring.
What counts as R&D in a Dynamics project?
If you’re solving a technical problem, building something new, or testing different approaches, it might qualify. Especially if there’s uncertainty in the outcome.
What records do I need for R&D tax relief?
Keep notes on what was trialled, what didn’t work, and how staff spent their time. Your adviser will help you structure this.
Is this guaranteed funding?
No. Grants are competitive. R&D relief depends on eligibility. Always get professional advice before you commit.
How long does a grant application take?
It varies. Some are quick (a few weeks). Others take months. Plan ahead and don’t rush it, especially if you need match funding ready.
Can I apply for a grant after starting the project?
Usually not. Most grants need you to apply before you start. If you’ve already kicked off, R&D tax relief might be your best bet.
Do I need a tech team to qualify for R&D relief?
Not necessarily. What matters is the work, not the job titles. If your team is solving technical problems, that’s what HMRC looks at.
What’s the catch with grants?
They’re great, but they come with strings. You’ll need to report progress, show evidence, and stick to timelines. Be ready for admin.
Can All My Systems help with funding applications?
We don’t write them, but we can help you shape the story. And we’ll introduce you to trusted advisers who specialise in grants and R&D claims.