Research and development (R&D) refers to activities that innovate and introduce new products and services, or improve existing offerings.
The broad nature of this term means that R&D can materialize in countless ways, spanning almost every industry.
Research & development (R&D) Tax Credits are a government incentive, providing innovative businesses with the opportunity to claim back up to 33% of their previous year’s R&D spending. Naturally, this scheme spurs reinvestment and helps companies scale-up their project, faster.
R&D tax relief has been proven successful in the UK, but considering it was implemented 20+ years ago, uptake is still much lower than what it could be.
And it’s not the case that businesses are turning their nose up at the idea of free funding.
The issue is that many companies are either unaware of the scheme, or don’t know if their project is eligible.
Perhaps, the sweeping ‘R&D’ term is a little too vague.
In this blog, we’ll be breaking down the concept of research and development into tangible examples.
By highlighting real-world research and development expenditure across multiple sectors, you can get an idea of just how many projects could be taking advantage of the r and d tax credits scheme.
🔬 Science & Medicine
Breakthrough medical treatments have seismic effects on societies around the world – think, the successful COVID vaccinations. So, this sector is a more obvious indicator of research & development.
Let’s say a pharmaceutical company based in the UK decided to make their medication easier to swallow. To do this, they try re-engineering a pill coating that’s not currently on the market, and develop methods of compacting the size of medication.
The lengthy and expensive process of trial and error can be supported by R&D Tax Credits, year after year. By using r&d tax relief to enrich their cashflow, this medical project can maintain the momentum needed to get their product to market.
🍴 Hospitality & FoodTech
In the age of reduced meat consumption, plant-based food innovation has skyrocketed. This is just one example of the increasingly prevalent R & D claim within the food and hospitality sectors.
A company aiming to advance meat substitutes by trialing new ingredients or novel methods will likely qualify for research and development tax