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 under claiming.

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 under claiming.

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

Do you have a qualifying R&D project? Check below.

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 under claiming could be this 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 change 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’s 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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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.

  • 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?
  • 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?
  • 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?

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?
See whether your company projects qualify for R&D tax relief

R&D tax relief scheme is remarkably inclusive but HMRC has specific guidelines on what companies can claim the benefit. Find out whether your project qualifies by clicking on the eligibility quiz button.

Project qualifies?
Create a FREE account in Novel and start making your R&D tax relief claim.

Novel was created and developed by R&D tax relief consultants with decades of experience to help businesses support and sustain their operations by claiming R&D tax relief.