Operating in highly competitive markets, the manufacturing and engineering sectors have long been at the forefront of innovation in the UK.
Staying ahead in these industries often requires developing advanced processes, innovative products and specialised tooling. However, these critical developments come with significant costs and risks to remain competitive, so companies must invest in Research and Development (R&D).
The government recognises the importance of innovation in stimulating economic growth, by offering R&D Tax Reliefs to support the financial burden that comes with this innovation, helping businesses to drive technological progress.
A successful R&D Tax Relief claim can result in tax savings of around 15% of every £1 spent on qualifying activities, support that can be reinvested into further advancements and future growth.
I have outlined what can qualify for R&D in the manufacturing and engineering sectors below and highlighted common areas where companies within these industries could benefit from this generous relief.
What can qualify?
Projects that involve design, build and development of new or improved innovative products or processes, which seek to resolve a scientific or technological uncertainty, could be eligible for R&D Tax Reliefs in the manufacturing and engineering industries.
Specifically, R&D Tax Reliefs apply to projects that go beyond routine work and involve solving scientific or technological uncertainties. This often includes advancing industry standards, developing innovative solutions, and addressing complex challenges in ways that cannot be readily achieved using existing knowledge or publicly available information.
Eligible R&D projects within the manufacturing and engineering sectors could encompass a wide range of activities, such as:
- Advancing standards in precision, tolerance or material performance.
- Overcoming regulatory changes by developing novel materials, components or production techniques to meet new compliance standards.
- Redesigning processes for greater efficiency to deliver improvements without sacrificing performance or quality.
- Enhancing the functionality of products.
- Enhancing existing processes to achieve better performance or cost savings.
- Designing innovative manufacturing equipment
- Improving or developing new construction equipment
- Prototyping and three-dimensional solid modelling
- Streamlining manufacturing processes through automation
Technological uncertainty is at the heart of a qualifying R&D project. This occurs when existing methods are insufficient or unknown, and new approaches must be created or adapted.
Whether it involves developing new products, optimising production lines, or finding innovative uses for materials, the key to eligibility is the intention to advance the overall technological capability in the field.
How our R&D services can help
The manufacturing and engineering sectors are the two main areas eligible for this support. We encourage companies genuinely advancing technology to contact us for an honest, transparent assessment of their eligibility. DJH’s expertise in this area can help you navigate the new standards and mechanisms for claims, ensuring they are robust and compliant.
Our expert team specialise in R&D incentives and are here to help your innovative business claim R&D Tax Reliefs.
