R&D Tax Credits in Food & Drink
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So, what is R&D?
R&D stands for research and development. It is the process of taking an idea and transforming it into a fully-fledged product or process. Researching, designing, creating and testing are all part of the R&D process.
What are R&D Tax Credits?
R&D tax credits are a government incentive designed to encourage innovation across multiple industries. This is an opportunity for you to reduce your corporation tax bill or receive a refund from HMRC based upon the number of working hours your business dedicates to Research & Development.
Under the scheme, SME’s can claim back up to 33% of the costs associated with R&D. That’s 33p back for every £1 spent on qualifying R&D activities. To get an idea of how much you could be refunded, check out our handy online calculator.
R&D Tax Credits in Food & Drink
Within the food sector, there is so much potential opportunity for a research and development tax credit claim. An example of this could be creating a new method of preservation.
The food industry is easily worth trillions of pounds because there is pressure to adapt foods to make them healthier, gluten-free, vegan, organic etc. Needs like these can come from both food regulators and consumers causing constraints on the innovators to improve the food.
An example of this would be when you see products stating ‘New Recipe’ or ‘Now with 20% less sugar’ on supermarket shelves. This can be seen as a marketing technique, however, there will be truth behind it. It is likely that behind the scenes, there was a substantial amount of research & development into bettering the product – justifying the claims on the packaging.
Do I qualify for R&D in food and beverage?
Developing food products is one of the most common projects which qualifies for R&D tax relief credits. Below are some examples of processes that could allow you to submit an R&D claim.
Time used adapting recipe formulation
Experimenting with new equipment
The expenditure on ingredients, heat & water
Design of more sustainable packaging
New techniques for waste reduction
How does it all work?
It all starts with a free, no-obligation consultation with one of our innovation relief specialists. This means that finding out if you’re eligible won’t cost you a penny. Our specialist will give you an in-depth explanation of what research and development is and what qualifies – asking you for some examples of activities your business conducts that you think may qualify for R&D tax relief.
Once a basic understanding has been established, you will be asked to send across your end of year accounts, CT600, and some other basic information. An estimated figure will be made for your refund – then your claim will be submitted.
Process Adaption:
Changing processes within the production of how the food or beverages are made, is another area in which you can submit an R&D claim. Some examples include:
Adding a robotic arm to assist production
Adding a conveyor belt
All these factors are techniques to assist production which then reduce staffing costs, time spent for creation, and increase the overall output.
Check out our R&D tax calculator
Work out how much your claim could be worth with our easy-to-use research & development tax credits calculator. Remember we can claim up to two years so make sure you don’t miss out on your innovation fund.
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