R&D Tax Credits for Food and Drink Businesses
Innovation is a never-ending requirement for food and drink businesses.
Consumer preferences change, the competitive environment changes, and the regulatory framework can change too.
Many companies involved in food and drink industry are unaware that much of their development work is eligible for R&D Tax Credit Relief. In fact according to the latest HMRC figures, the food sector claims are extremely small compared to other sectors - there were only 210 claims under the SME scheme in 2017/2018, with a value of just £5million.
This could be because of the way food and drink companies have been counted for in the statistics, but it could also be a due to a lack of awareness of either the scheme, or their own eligible activities
Examples of Qualifying R&D Activities in the Food & Drink Industry
- Developing plant-based products to replace animal-derived products
- Scaling up a traditional or home recipe to be viable in a commercial environment
- Developing food product formulations to achieve specified analytical requirements, e.g. to meet new targets for pH level, sugar content, salt content, lipid content, product viscosity
- Developing new formulations where the outcome is uncertain
- Investigating alternative ingredients, for improved health or environmental benefits
- Developing production process specifications and techniques for new food products, including mixing times, batching sequences, and cooking temperatures
- Improving production processes to increase efficiency and/or waste reduction
- Developing and testing products and processes to meet new regulatory requirements
- Developing improved packaging solutions, e.g. for biodegradability, recyclable, portability, longer shelf-life, traceability, etc
SMEs are missing out on £thousands in R&D tax credit relief
Many companies are unaware that their activities to develop new products for their customers or themselves are in fact research and development, the costs of which can be very significant when all contributions are taken into consideration
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