Despite the Government’s efforts to encourage innovation through R&D tax credits, many food and beverage companies hesitate to claim.
Those food and beverage taxpayers new to the R&D programme may think they are not eligible for Research and Development (R&D) tax credits. They often picture large corporations or pharmaceutical companies, or those companies that have patents to be eligible.
With that in mind, let us look at 3 activities your company is more than likely not already doing which will make you a candidate to claim R&D tax relief.
- Improving your products
A company we recently assisted with its R&D tax credit claim had developed new and improved frozen cookies, cakes, and ice cream. Under what is defined as Food Sciences, companies such as these ones are eligible to claim and the solutions do NOT have to be cutting-edge. For example, this company wanted to improve the taste, texture, and shelf-life of its products. This is what is defined as Food Sciences. These food improved products undertook a process where R&D tax credits were claimable, based on the following activities:
• An iterative approach experimenting with multi-ingredients to ensure all food had better taste and shelf life of its products.
• The company carried out a strenuous undertaking of batch size trials to ensure the food products improved the taste and texture requirements of the company’s set goals.
As a result, the company netted £210,000 in R&D tax credit benefits.
- Developing a new platform or app associated with your food and beverage products
While consumers can purchase your products face-to-face, many prefer using online apps to deliver products directly to them. If your company has an internal software development team and / or hire a company that develops an in-depth app solution where consumers may purchase and have products delivered directly, be it for wholesale or retail, you are likely to be an excellent candidate to claim R&D tax credits.
- How much time are you taking to complete a project?
Anytime RDP Associates carries out its 15-to-20-minute complimentary assessment, we always show how long it takes to complete or shelve a given project. The rule of thumb to follow is the longer it took to complete or shelve the project, the more likely an R&D claim is at hand.
A good example of an R&D activity is if your company has a lab or an area where your key staff members are consistently undertaking recipe development for taste, texture, and shelf-life, and are unable to “get it right” on the first try and multiple trials are necessary. If a given product is shelved for whatever reason, this is even a better example of an R&D project that has taken place.
RDP provides R&D tax credit services and grant funding solutions across 17 different industries and in 6 different countries. For additional information on these topics, please contact us and we can advise your eligibility.