Three things you do that qualify for R&D tax relief

When people think of research and development (R&D), they often picture large corporations or specialist science, tech or pharmaceutical companies. Perhaps this explains why, despite Government efforts to encourage innovation through the introduction of R&D tax credits, only one in five ‘innovation active’ businesses have ever claimed.

We believe that demystifying qualifying factors will help companies like yours see the opportunity for claiming and help stimulate growth through innovation across the UK.

With that in mind, let’s look at three things you’re probably already doing that could mean you qualify for R&D tax relief.

1: Improving products

Manufacturing businesses are perfectly positioned to take advantage of R&D tax relief as most are constantly required to research and develop or redevelop products in response to rapidly changing technology, practices, standards, customer requirements, and competition.

The keyword here is research; it doesn’t actually matter whether your product development is successful or not, as what you claim for is time invested in the project as a whole.

For the year 2017-18, the average R&D tax relief claim value from the manufacturing sector was £97,948, so the opportunity for a hefty return is very real.

Example:

One of our clients, Bee Lighting, successfully qualified for a R&D tax rebate against a product improvement project they undertook last year.

Bee Lighting develops lighting for vehicles, investing in specialist design and engineering to regularly produce brand new solutions.

In one case, to create the right light for the client Bee Lighting developed and tested over 100 iterations of lens shape, 1000 frosting effects, and four ways of fixing a lens.

For this project, the brief was met and the new, unique bulb produced; all of the time and associated costs invested in developing the product were included in a successful R&D tax relief claim.

2: Creating new systems or software

Innovation required in the adoption of other technology is often one of the most overlooked opportunities when it comes to claiming for R&D relief.

  • Have you developed a new system, piece of software or process to allow you to integrate new tech?
  • Have you worked with a provider to adapt their tech even further?
  • Have you resolved implementation or compatibility challenges that no one else has been able to address before?

There are lots of myths about the opportunities for claiming R&D tax relief in the IT sector, but it’ soften an untapped source of qualifying expenditure so don’t discount your own work on IT without seeking professional advice first.

Example:

In order to pick, pack, and dispatch high volumes of NHS prescription orders, leading logistics integration company Logistex worked in collaboration with a pioneer in digital healthcare to design and develop a new automated end to end system.

The new system integrated a range of technologies across picking, packaging, and dispensing, and the work done to get these complementary elements to work together will allow the industry as a whole to move forwards.

Logistex worked with us to submit a successful claim for R&D tax credits against this collaborative project.

3: Developing bespoke solutions

There won’t be many businesses that haven’t been presented with a unique problem by a particular client. That is, after all, the driver of invention and innovation!

Though the work that goes into developing bespoke solutions is about meeting a brief or specific client need, it also has the added benefit of making you eligible for R&D tax credits. It’s often overlooked but a very real part of working with a wide variety of clients across all industries, from software to manufacturing to construction and beyond.

Example

One business that has been able to claim for bespoke solutions work is 48.3 Scaffold Design Limited, highly skilled structural engineers who design and develop scaffolding systems for commercial projects throughout the UK.

48.3 Scaffold Design Limited create unique systems for challenging projects, and pushing the boundaries in their field means they qualify for R&D tax credits.

What bespoke projects is your business working on that could qualify for R&D tax credits?

 

In our experience UK businesses are some of the most innovative in the world, however, relatively few are aware that this entitles them to thousands of pounds in tex relief.

Don’t be one of the ones to miss out, your reward could be just a phone call away.

Review your projects with one of our specialists today