Manufacturing R&D

R&D Tax Credit Examples, Hints & Tips To Maximise Your Benefit
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Amount claimed


Top 10 R&D Sector

Each industry has its own nuances, if you’re a manufacturing firm that thinks that you’re eligible for this incentive, then keep reading! Here, we’ll go through your most common claim areas, activity that doesn’t qualify and some surprising examples of what you can claim for!


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Manufacturing for your R&D activity?

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Case Study

Read about a manufacturing firm that was told they did not qualify for R&D Tax Credits, and how a 10 minute conversation with one of our consultants resulted in a £500k claim over 2 years.

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4 Project Examples

Find out what qualifies in manufacturing

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Process developments

Manufacturing is one of the biggest sectors that claim for R&D Tax Credit relief, and there is a clear reason why. With heavy digitalisation of machinery, it is common for manufacturers to claim for development instead of research. If you are working on making your current production processes more efficient, you may be eligible to claim!

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Digitisation is your R&D friend. Many manufacturers use software such as Oracle or SAP which are often customised to your specific project. Those customisations might grant you a heavy tax relief.

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New technology

Don't forget that although HMRC are looking for advancements in technology, this does not limit your claim to purely developing new products and systems. If for example, you have developed a new technology and you have done extensive worked to implement it to your older system, you can claim for this! You can encounter many obstacles on your way and require experts to support you in this development, this is the definition of R&D!

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If you have developed a new way of operating that decreases your carbon footprint, you might be eligible under the R&D Tax Credit incentive.


Frequently asked questions.

In short, yes. The best thing to do is to figure out how much R&D you are doing, you should then be able to assign a proportion of your light, heat, water and power that was used for your R&D and amend your claim accordingly. 

One of the biggest portions of claims for the Research and Development tax incentive is circled around staff costs. Whether that might be people directly involved within the R&D or others who might be indirectly involved.

No, you do not need to create a new product to qualify for R&D Tax Credits. For example, if you tweaked a product which had an advancement, this could be claimed for the R&D incentive. Anytime you have attempted an advancement in the manufacturing sector, whether this worked or not, could still have the potential to be a qualifying activity.

In 2020, there were 11,895 claims processed by HMRC for the Manufacturing sector, but on average you could receive £50,021 for your successful claim based on current statistics.

Where do we start? You can claim for:

  • New machinery creation
  • New bespoke ways of increasing efficiency during your manufacturing process – this could be through creation or alteration of machinery or systems
  • A portion of your utilities bill
  • Subcontractors (up to 65%)

Yes! You are able to claim for unsuccessful projects as this falls under the ‘uncertainty’ you faced during the Research and Development you undertook.

Examples of uncertainty for R&D are;

  • Fixing an issue with machinery that does not meet your requirements however the issue keeps coming back and is not solved
  • Managing environmental factors, decreasing your carbon footprint during your construction process 
  • Adaptations and amendments in current products and/or services which you thought would work but after essential research did not work as hoped

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Find out how simple it is to claim your Software and Technology R&D Tax Credits.

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Costs which don't qualify

What doesn’t qualify in manufacturing?

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If your company has developed a prototype but you aim to sell it on to a client, you will no longer be eligible to claim R&D expenditure for that prototype.

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Dividend payments

This should be looked at on a case to case basis. It is important to point out that any dividend payment are not eligible for R&D Tax Relief, hence why if your director is very involved within the R&D process, it makes more sense to pay them a salary.

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It is crucial to remember that fixed assets are not eligible under the current rules, although they may be heavily involved in the R&D process. Intangible assets have some exceptions, but we can give you expert advise on this.

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Non scientific/technical advancements

Always make sure that your product development contributes to the advancement of technology or science. Without an actual advancement, your expenditure won't qualify.

Find more about R&D in your sector!

Depending on your company size, you may qualify under the RDEC scheme (Research and Development Expenditure Credit) or under SME incentive (Small Medium Enterprises).

Find out more about your eligibility today.

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Start your claim with Counting King today!

Don’t hesitate on starting your claim, you could be entitled to money you didn’t realise you could have. With Counting Kings simple process you don’t need to worry about your time invested in the claim.

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