UK food production companies are missing out on research and development (R&D) tax credits worth tens of thousands of pounds, because they don’t know they are eligible, says Kerry Lawrence, director at Compass Accountants. While there has been an increase in R&D tax credit claims in recent years, most are being made by larger organisations. Many small to medium sized companies are eligible to claim, but do not.
The main reasons for this are that they are either entirely unaware of the opportunity, that they do not believe that these credits are available to them, or that they lack the knowledge required to document and demonstrate projects, expenditures and activities that can be claimed for.
Many businesses consider only the greater advances in research and development to be eligible processes, however making a technical change in some aspect of the food production process may, if properly documented, be entirely appropriate for the R&D tax claim.
If an organisation in the food processing sector makes technical adjustments to the process to enhance flavours or improve the appearance, nutritional content or shelf-life, the labour spent, materials used and consumables lost throughout these developments can also be claimed. These often overlooked elements can lead to a substantial R&D claim.
Compass Accountants offers free consultations to organisations in the food production sector that may wish to know whether the processes and challenges they have faced are eligible for the R&D claim.