R&D Tax Credits For Manufacturing Companies

Making your Manufacturing R&D tax credit claim

Introduced in 2000, R&D tax relief is the government’s way of rewarding businesses that are developing new, or improving existing products, processes, services, devices and materials or advancing the state of knowledge in their sector. This encourages companies to continue innovating.

Did you know that the average R&D Tax credit claim is over £50,000? Over £5 billion was repaid last year in the UK alone and yet thousands of companies are not claiming the money that they are entitled to. The Government estimates that 90% of eligible companies fail to claim what is rightfully theirs.

Many business owners are either unaware of the potential benefits of R&D tax credits, mistakenly think they are difficult to qualify for, or simply don’t think the scheme will apply to their business.

Don’t fall into this trap. Research and development isn’t all about scientific experiments, conducted by people wearing white coats. It’s very likely your business is already doing a lot of the activities required to make successful R&D Tax claims.

Getting your head around the tax laws can be exhausting, and the claim process can be complicated. That’s why to have the best chance of a successful claim, you need a specialist on your side.  Our R&D experts will guide you through the process, from looking at the eligibility criteria, to carrying out the claim for you. Yes, we also deal with HMRC directly on your behalf.

There’s no risk attached and the initial assessment will only take around thirty minutes of your time. We’ll thoroughly assess you and if we can’t see an opportunity for you to claim R&D tax relief, you walk away without spending a penny. Here's what to expect.

Does your Engineering company have a claim?

Companies that spend money developing new products, processes or services; or enhancing existing ones, are eligible for R&D tax relief. If you’re spending money on your innovation, you can make an R&D tax credit claim to receive either a cash payment and/or Corporation Tax reduction. The scope for identifying R&D is huge – in fact, it exists in every single sector. And if you’re making a claim for the first time, you can typically claim R&D tax relief for your last two completed accounting periods.

An important thing to remember with the current tax credit system is, that the project doesn’t necessarily have to be successful in order to qualify. As long as the research qualifies under the definitions in place, the Tax Credit can be claimed, regardless of the outcome of the project. R&D can take place in any sector. It occurs in everything from cheese-making to chemical engineering, and construction to digital development. To benefit from R&D Tax incentives, a company must be:

• A UK Limited company, subject to Corporation Tax
• Have carried out qualifying research and development activities (see below)
• Have spent money on these projects (wages, materials, sub-contracting etc)

Qualifying R&D Activities – Manufacturing Sector

• Development of processing and handling techniques
• The design, testing and trialling of prototypes and demonstration plant
• Scaling up of production processes. Often, lab based systems do not scale up to operational capacity without further technical achievements being achieved
• Adaption to include new or alternative materials. This may be driven by legislation, environmental aims or operational efficiency
• Integration of new technology with old systems
• Introduction and development of new product to the production line
• Equipment development
• New formulation of an existing product
• Improvement of production process
• Innovative product development using computer aided design tools
• Development of second generation or improved products
• Tooling and equipment fixture design and development
• Developing unique computer numerical control programs
• Designing innovative programmable logic controllers
• Designing innovative manufacturing equipment
• Prototyping and three-dimensional solid modelling
• Development of computer models
• Designing and developing cost-effective and innovative operational processes
• Integrating new materials to improve product performance and manufacturing processes
• Evaluating and determining the most efficient flow of material
• Designing and evaluating process alternatives
• Increasing ease of operation or suitability of manufactured products
• Designing, constructing, and testing product prototypes
• Developing processes that would meet increasing regulatory requirements
• Streamlining manufacturing processes through automation.

Our R&D Expertise in the Manufacturing Sector

R&D can take place in any sector. But there are some sectors that invest more often in innovation, such as engineering firms, manufacturing companies, IT firms or companies in the pharmaceutical or aviation sectors.

Our experts have been preparing R&D claims and assisting on R&D related activities for many years. Whilst we help businesses of all sizes, in all business sectors claim tax relief under the HMRC’s Research and Development Tax Credit scheme, it is fair to say that we specialise in identifying and preparing claims for clients within the Manufacturing sector.

Over the years, we have refined our approach which now minimises the time required of the client in preparation of the claim whilst ensuring that HMRC’s requirements are met. To date, we have claimed over £20 million for our Manufacturing clients.