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R&D Tax Credits In The Food & Drink Industry

Posted on September 29, 2021

When most business owners think of R&D Tax Credits, they typically imagine businesses claiming that are working within laboratories, making ground-breaking discoveries, they do not typically imagine the Food & Drink industry – however, this is a damaging misconception that has lead to many Food & Drink manufacturers ruling out the possibilities of their businesses being able to claim. 

With modern society having a distinct need for new Food & Drink innovations that help to combat sustainability issues and overpopulation, the R&D Tax Credits scheme wants to reward your innovative efforts. An example of a successful claim is a company that creates microwave meals for retail stores being rewarded £15,856.66 in the form of an R&D Tax Credits reward payout. The business decided to create its own vegan recipes from scratch and manufactured its own eco-friendly packaging in-house. The uncertainty was that the meals were not a guaranteed success, and lots of money was put into the project without a definite successful outcome. The risks taken and ingredients used resulted in a successful end-product after numerous failed attempts (which are also claimable), and the money that they managed to claim back was also from the year prior. It assisted them with growing their brand and investing their money back into their business.

The Food & Drink industry carries out ground-breaking innovations every year, and to be eligible for the scheme it can be as simple as simply coming up with a new recipe for a cake, or a new method of preservation. The food industry itself contributes a huge £3.1bn to the UK economy a year and is the UK’s largest manufacturing sector being larger than Aerospace and Automotive industries combined.  

Some examples of qualifying activities are:

  • Experimenting with lower salt and sugar content
  • Developing new food processing techniques
  • Experimenting with more sustainable food production methods
  • Sustainable packaging
  • Developing new recipes that include fewer additives
  • Creating gluten-free and vegan product variations
  • New techniques for waste reduction

These are just a few examples of qualifying activities, with the possibilities being endless. Anything that you have created, improved or adapted in order to overcome a technical or scientific uncertainty may be eligible. 

To find out more about how your Food & Drink business can claim R&D Tax Credits, click here.