Under rules inserted into UK tax law in February 2024, an assignment of the right to be paid a research and development credit, or an agreement to assign it, made on or after 22 November 2023 is void, unless the assignment carries out an agreement made before that date. French law, by contrast, still allows a research-tax-credit receivable on the state to be assigned to a credit institution, a financing company or a qualifying fund. The difference matters because European defence innovation is paid for long before it becomes a deliverable military capability. Engineers, prototypes, specialist subcontractors, semiconductor designs and test campaigns must be funded before a customer accepts a system, and often before a supplier reaches an invoiceable procurement milestone.
Research tax incentives alter that financing burden without removing it. A credit can be economically valuable without being immediately spendable; a refundable claim can take time to become cash; an accounting credit can differ from the amount ultimately payable; and an expected claim on the state may or may not be capable of being sold, pledged or advanced against. For European defence and dual-use companies, the headline relief rate is therefore a poor guide to the support that reaches a development programme. The question is how much development expenditure remains to be financed, for how long, by whom, and with what residual risk between the research outlay and the point at which public support becomes unrestricted cash.