UK manufacturing and engineering sectors have consistently led the way in innovation whilst operating within highly competitive marketplaces.
To maintain competitive advantage in these industries, companies must develop sophisticated processes, groundbreaking products and specialised equipment. These essential developments involve considerable investment and risk, making Research and Development (R&D) expenditure necessary for continued success.
Recognising innovation's vital role in economic development, the UK government provides R&D Tax Reliefs to ease the financial challenges associated with innovation, supporting businesses in their pursuit of technological advancement.
A successful R&D Tax Relief application can deliver tax reductions of approximately 15% for every pound invested in qualifying activities—support that businesses can channel back into further innovation and expansion.
We’ve outlined qualifying R&D activities within the manufacturing and engineering industries and highlighted common areas where businesses in these sectors could benefit from this valuable relief.
What qualifies for these reliefs?
Projects involving the design, construction and development of new or enhanced innovative products or processes, which aim to resolve scientific or technological uncertainties, may qualify for R&D Tax Reliefs in the manufacturing and engineering industries.
Specifically, these tax benefits apply to projects extending beyond routine operations and addressing scientific or technological challenges. This typically includes pushing industry benchmarks forward, creating innovative solutions, and tackling complex problems in ways not already achievable using existing knowledge or publicly accessible information.
Qualifying R&D projects in manufacturing and engineering might include:
- Pushing boundaries in precision, tolerance or material performance
- Meeting regulatory changes through developing unique materials, components or production methods to satisfy new compliance requirements
- Restructuring processes for improved efficiency whilst maintaining performance and quality standards
- Expanding product functionality
- Upgrading existing processes to deliver enhanced performance or cost efficiencies
- Creating innovative manufacturing equipment
- Enhancing or developing construction equipment
- Prototype development and three-dimensional modelling
- Improving manufacturing efficiency through automation
Technological uncertainty forms the foundation of qualifying R&D work. This occurs when current methods prove inadequate or unknown, necessitating the creation or adaptation of new approaches.
Whether developing new products, optimising production capabilities, or discovering innovative material applications, eligibility hinges on the intention to advance the overall technological capability within the field.
Manufacturing and engineering are the primary sectors eligible for this support. We encourage companies advancing technology to reach out for an honest, transparent assessment of their eligibility.
Want to learn more about our R&D services?
Our expertise can help you navigate the updated standards and procedures for claims, ensuring they remain robust and compliant. Contact us today to discuss how R&D Tax Relief could benefit your business.