Have your cake and eat it!

23 July 2018

A common myth in relation to Research and Development (‘R&D’) tax relief is that qualifying activities are only undertaken by scientists in white coats. The tax definition of R&D is much wider than this, and can take place when a project attempts to achieve an advance in science or technology.

A growing industry where this tax relief is under-claimed is the food and drink industry. There are various activities undertaken by innovative food and drink firms that could qualify such as:

  • Using science or technology to develop new products

  • Redeveloping existing products to improve the shelf life or adapt the nutritional value

  • Improving the manufacturing process in order to achieve greater outputs and efficiency

Companies in the food and drink industry need to constantly adapt, driven by consumer tastes, government regulation and increased competition, forcing companies to innovate. This can result in qualifying R&D activities. Claiming R&D tax relief can significantly reduce the costs associated with innovation and assist with funding future developments.

In the Autumn 2017 budget, Chancellor Philip Hammond announced increased government spending on R&D in a push to support innovative firms. These companies are plentiful in the food and drink industry and should be considering these government supported reliefs when undertaking potential qualifying activities.

Many companies are missing out on the reliefs as they believe this innovation is simply ‘what we do’ - however, if a specialist in your area would find what you are trying to do difficult to achieve, there may well be qualifying R&D activity.

How can we help?

We have a proven track record of working with our clients to provide commercially driven claims for these reliefs.

We can:

  • Establish whether your company qualifies for any of the reliefs;

  • Provide advice on the requirements for supporting documentation and records;

  • Work with you to prepare and submit claims to HM Revenue & Customs and deal with any subsequent enquiry.

For more information please contact Moira Kelly (moira.kelly@aab.uk) or your usual AAB contact.

To find out more about Moira, click here

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