Manufacturing and
R&D Tax Relief

Innovation in the manufacturing sector allows companies to address the changing consumer needs and industry standards. If your company recently introduced new or improved products, or enhanced manufacturing processes, you may benefit from R&D tax relief. Manufacturers are leading the way when it comes to leveraging tax relief. The recently published statistics by HMRC reveal that manufacturers are one of the main sectors claiming R&D tax relief. Despite this, the average claim value is one of the lowest of all sectors, highlighting a possible issue with some companies underclaiming.

25% of all claims are made by manufacturing firms, yet the average claim value is one of the lowest of all sectors.

No two manufacturing industries are exactly alike; some are more physically labour intensive, others more knowledge intensive. To some, proximity to customers is essentials, whereas others rely heavily on transport. One possible reason for manufacturers underclaiming could be the misunderstanding of the different types of projects that qualify. From the initial designs to the final project, manufacturers may be facing challenges at every stage of the manufacturing process, all of which can qualify for R&D tax credits. 

Adapting to changes in legislations, new chemicals, health and safety concerns, and different techniques, you may have been undertaking valuable, qualifying R&D work without realising it! As the manufacturing market gets tougher and pressure from new entrants grows, it is important for companies to utilise the valuable R&D tax credit scheme. It can help boost businesses and also acts as a reward for the innovation that is done.

What is R&D tax credit?

The UK Government’s Research and Development Tax Relief scheme is a way to encourage and reward companies that are investing in innovation.  

What qualifies as innovation? 

For tax purposes, R&D takes place when you are creating something that will advance the overall knowledge or capability in the field of science and technology. In simple terms, if you are solving industry problems, creating new software, process or materials, you qualify.

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learn more.

what qualifies?

The manufacturing sector is diverse and most manufacturing projects come with their own set of challenges. Improving functionality, reliability, quality, performance, materials or greener solutions all count toward an R&D tax credits claim.

Innovative Techniques

  • Are you developing innovative ways of re-using materials?
  • Are you working on prototyping and three-dimensional modelling?
  • Are you working on a more cost effective operational model?
  • Are you working on an operation model that is driven by sustainability?
  • Are you creating robots that can work alongside humans during production?
  • Have you created techniques that improve the workflow and production processes of a company?

Innovative Materials

  • Are you creating new or alternative materials to replace or improve existing materials?
  •  Are you creating new materials to meet new regulatory requirements?
  • Are you working on eco solutions, such as alternatives to traditional plastic packaging?
  •  Are you designing and testing new prototypes?

System Improvements

  • Are you using automation to improve manufacturing processes?
  • Are you working on ways to integrate new technology with old systems to improve manufacturing processes?
  •  Are you developing virtual or mixed reality software?
  • Do you use digital modelling to help design factory layouts or to maximise space efficiency?
  • Have you created innovative software that tackles manufacturers problems, such as inventory management?

Want to find out whether you can claim 33% of your R&D costs back?

There is a reason it's called innovation.

Think your project qualifies but we did not mention it above? Get in touch with us and let us see whether you qualify for an R&D tax credit.

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sector Specialist Consultants

Each case is handled by our sector specialist R&D consultant that will help ensure that we identify as many activities as possible that qualify for R&D tax relief.

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we get to know you

To get you the maximum benefit from your claim, we take the time to get to know your business so when it comes to writing the report, we create a claim that maximises your reward potential.

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Supporting your every step

We will prepare and submit your claim to HMRC so you don't have to worry. Alternatively, we can work with your accountant to help, and manage the process.

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R&D specialist accountants

Did you know that many companies only claim back a fraction of their costs, rather than the full sum? We have a team of trained accountants to identify all possible eligible expenditures to ensure that the above never happens to you.

Are you eligible for
R&D Tax Relief?

1. Are you a limited company based in the UK?

2. Have you been trading for at least a year?

3. Do you employ less than 500 people?

4. Is your turnover less than £85 million a year?

5. Are you improving existing products or creating something new that will advance science & technology?

Did you answer “yes” to all those questions? Great! You are most likely eligible.

Still have questions? Just hop on a call with us and we will help discuss with you whether you qualify.