What a relief
While many food and drink manufacturers will have heard of research and development (R&D) tax relief, most think it’s not really applicable to them.
However, the truth is it’s available to companies in every industry, including food manufacturing. The only thing that matters is whether the company in question is developing new products, services or systems – or materially improving existing ones.
Unfortunately, according to HMRC, fewer than one per cent of UK companies eligible for R&D tax credits ever make a claim because of their complexity. It’s a shame because the financial benefits can be considerable.
Case in point
For example, a family run food manufacturing company based in Coventry made a claim recently and received £187,000 back from HMRC for research it had carried out to find a unique smoking and curing process for gammon and ham (this was nearly 25 per cent of its initial investment in R&D). The food manufacturing company approached RD Tax Solutions, we undertook a detailed investigation into the work the company had carried out and built a profile of costs incurred. We then sent a full breakdown to HMRC, which was promptly signed off.
It’s worth mentioning that most R&D tax specialists operate on a ‘results based’ basis, and only charge a fee once the tax benefit has been identified, meaning there is no risk and no upfront cost for food and drink manufacturers.
Finally, it’s vital that any food or drink company that thinks it might be eligible for claiming R&D tax relief acts quickly, as claims can only go back two tax years.
Mark Tighe, managing director, RD Tax Solutions