Research and Development (R&D) Tax Specialists at Jeffreys Henry have secured over £30,000 in R&D Tax Relief for a Soil Association certified skin care manufacturer.
Introduced by the UK Government in 2000, R&D Tax Relief is a key part of the government’s strategy to support innovation in the UK by allowing businesses to reclaim some of the money they have spent on developing a new, or improving an existing, product, service or processes.
Loss-making companies can claim an R&D Tax Credit repayment from HMRC of up to £33.33 for every £100 spent on qualifying R&D expenditure.
Profit-making companies can claim R&D Tax Relief which reduces their corporation tax bill by up to 230%.
Qualifying R&D expenditure includes staff costs, subcontractors, ingredients, materials and equipment used for testing, utilities (power, water and fuel) and computer software.
Our research has indicated similar skin care and makeup brands, including free-from ranges are missing out on thousands of pounds worth of R&D Tax Relief that can help to fund the cost of new employees, equipment or re-invest in further innovation.
Despite the benefits, a very small number of beauty, skin care and cosmetic brands have ever submitted a claim to HMRC because of its perceived complexity and a misunderstanding of what constitutes qualifying R&D activity.
The above mentioned natural skin care manufacturer demonstrated how they replaced chemical based compounds with natural, environmentally friendly ingredients that has the same or alternative benefits to skin care as chemically based products without compromising on shelf life and overall quality and integrity.
To quality, a company needs to have a systematic project in place, and the work which you are undertaking must be seeking to achieve an advance in science or technology, e.g. development a new product, process or service, or appreciably improving an existing one.
A qualifying project is one where there is an advance (or an attempted advance) in a field of science or technology. This sounds quite restrictive, but in practice it could apply to any company and in any industry. The term “Science” is very broad and can include Computer Science, Food Science, Engineering, Medical / Clinical Research etc.
Generally, where a company has faced technical problems that have to be solved and there is no standard solution which could be utilised, then that is a good indicator that R&D activities are taking place.
Partner - Corporate and R&D Tax
Corporate and R&D Tax Director
