R&D Tax Relief in Food Manufacturing

Making; changing; improving or attempting to overcome technical or manufacturing problems are all indicators for eligibility for R&D tax relief, read more in our guide.

Published/updated:

27 May 2021

Bakery production line with sweet cookies on conveyor belt in confectionery factory workshop, food production manufacturing.

Introduced by the UK Government in 2000, the R&D tax relief scheme is designed to encourage innovation and global competitiveness by allowing companies to reclaim some of the money invested in qualifying research and development. R&D tax credits are generally considered to be one of the most attractive tax reliefs available, often resulting in significant cash repayments from HMRC.

What are the benefits?

The benefits of the programme include increased cashflow, which is especially important to innovative, developing companies. It also encourage development or a corporate philosophy that embraces innovation and improvement.

Do you qualify?

A common misconception is that the scheme is just for companies with R&D departments and men in white coats. The fact is that any company that spends money trying to improve a product or service through a technological advance, using qualified staff and appropriate project controls, and where there's doubt about the project's success is likely to be eligible.

R&D Tax Relief in Food Manufacturing

Making; changing; improving or attempting to overcome technical or manufacturing problems are all indicators for eligibility for R&D tax relief. Food manufacturing/processing are the methods and techniques used to transform raw ingredients into food for human consumption.

Food processing takes clean, harvested or slaughtered and butchered components, and uses them to produce marketable food products. The food manufacturing industry draws on the chemical and biological interactions between the ingredients and their response to various pre and post treatment methods such as agitation/mixing, cooking and freezing.

Many other areas of technology are also involved, to the point where it is hard to find an area that does not have a direct impact on the food industry. R&D in this sector is generally drive by changes to legislation, consumer trends and specialist dietary requirements.

What are the potential areas of eligibility?

A vast range of activity, which could include:

  • Elimination or allergens and food additives.
  • Extending shelf life of goods.
  • Product development for specialist dietary requirements (Low salt, sugar etc.)
  • Resolving technical problems with production processes (e.g. seasonal variation in quality).

What problems might a company face?

  • Problems caused with variation in raw material quality, specification or strength.
  • Retaining the same look, taste and texture after changing ingredients or raw materials.
  • Developing new processing methods after the introduction of new equipment.
  • Poor shelf life in new products.
  • Products deteriorating in transit.

Eligibility questionnaire

If you can answer 'Yes' to most of these questions then, based on our experience across thousands of clients, it looks like you could have a successful claim:

  • Have you developed new tools, products or services using technology?
  • Have you tried to improve your existing products through technical changes?
  • Have you had to resolve technical problems with any of your products?
  • Have you found more efficient ways to produce your products or services?
  • Have you experimented with new equipment or production techniques?
  • At the start of a project, did you ever think 'I'm not sure of the best way to do this'?
  • Have any of your projects failed for technical reasons?

Why ABGI?

ABGI is a leading international tax incentive and innovation management advisor. We help companies accelerate their innovation activity by identifying and securing appropriate funding in the form of grants, tax incentives or commercial funding.

With 30+ years heritage and 200 experts, we manage +£870million of innovation incentives annually across 19 countries, for some of the world's best known brands.

Whatever innovation funding challenges you face - wherever you're based - we can help.

 

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