Research and Development Tax Relief for the Manufacturing and Engineering Industry

Which sectors of engineering and manufacturing and industries are eligible for R&D Tax Credit?

Established in the 1980’s, Research & Development Tax Credit, benefits both large and small businesses in UK. Any company that invests in innovation of any kind qualifies for an R&D tax credit claim. This also applies to large-scale manufacturing businesses, small-scale enterprises, SMEs and start-ups.

Many of the businesses however fail to take this advantage maybe because they do not know if they are are eligible for government tax relief.

There are many engineering and manufacturing businesses in the UK. They range from small scale to large-scale industries. Majority of these industries spend lots of money to develop new products and reinvent the existing ones. Some of these businesses do not know whether they qualify for R&D tax credit claims.

Below is a look at the type of businesses in the engineering and manufacturing sectors that are eligible for R&D.

Engineering and manufacturing projects that qualify for R&D tax credits

Below are examples of the most common process and product projects in the UK that are eligible for R&D tax relief.

  • Creating and designing and financially savvy and imaginative operational procedures
  • Assessing and designing process options
  • Designing inventive assembling hardware
  • Processing of new inventive programmable rationale controllers
  • Development, designing, and testing item models
  • Processing forms that would meet expanding administrative prerequisites
  • Development of exceptional PC numerical control programs
  • Development of second era or enhanced items
  • Making an evaluation and a deciding the most productive stream of material
  • Using computer aided tools to progress item advancement
  • Introducing new materials to enhance item execution and assembling forms
  • Processing three-dimensional strong models and prototyping

If you have a company in any of the above categories and it is taking risks by improving, developing and innovating processes, services and products, then your company definitely qualifies for tax relief credit from R&D.

Which projects in the engineering and manufacturing businesses are eligible for R&D tax credit?

Likewise, there are projects in your engineering and manufacturing businesses that qualify for tax claims.

  • Technology designing, analysing, and developing
  • Defining technical objectives
  • Feasibility studies
  • Identifying uncertainties
  • Planning and managing projects
  • Technical specification production and any other documentation that gives a solid explanation and enough support for the advancement of R&D
  • Checking and Reviewing any new competitive technologies in the market
  • Checking the final product, process or software

Indirect support activities that are eligible for R&D tax claim in the engineering and manufacturing sectors

A few indirect support activities in these two sectors are eligible for tax relief. They are

  • Training to support R&D
  • Services in the Personnel departments which give R&D activities support
  • Finance
  • Administration

Which R&D expenditure engineering and manufacturing projects can claim from R&D Credit?

The above sectors qualify to claim tax relief on any costs expended through the P&L account and capital expenditure. The areas where these costs arise from are

  • Workers provided from outside the agency
  • Any Consumable items changed by the process of R&D like light, heat, materials, power and equipment.
  • Software license costs
  • General costs incurred by the staff like; reimbursed expenses for activities relating to R&D, employer’s NI, gross pay, and employer’s pension contributions
  • Freelancers and Subcontractors

What are the staff roles that qualify for R&D Tax Claim for projects in the engineering and manufacturing sectors?

The majority of the R&D team are from the organisation and very rarely, will there be a staff member from outside the team. The roles the team plays are included in the R&D tax claim. The following personnel members make up the team

  • A Lead Developer
  • Cost Accountants
  • Engineers
  • Senior management team members
  • Project Co-ordinators
  • Specialists in Quality Control and Testing
  • R&D Manager

Contrary to popular belief, R&D does not only benefit businesses that engage in laboratory work like the pharmaceutical R & D sector. The truth is majority of the businesses in every industry qualify for R&D tax credit claim.

The most important requirement however must be an undertaking of activities that will bring development and advancement mostly in the fields of science and technology.

Some of the businesses in the engineering and manufacturing sectors that are advancing their products in technology are software development businesses, different kinds of engineering businesses and many food production businesses. Therefore, if you fall under any category that is using innovation to progress, do not wait any longer, get R&D tax relief

If you have any questions or want to learn more, simply fill the quick enquiry form and get all the information you need about your company’s eligibility.