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 companies in the current uncertain economic climate. It also encourages development of a corporate philosophy that embraces innovation and improvement.
Do you qualify?
Companies from EVERY industry sector can make a claim, from agriculture and life sciences to space industries. If you are working towards an advance in your field and facing uncertainty in how to do it you could very well be eligible for R&D tax relief.
R&D in Toy Manufacturing
The UK is the largest toy market in Europe and fourth largest globally. From an R&D perspective, the toy sector supply chain is a rich and diverse field, covering research, design, manufacture, operation, and maintenance.
More than 40,000 new toy products are introduced each year by about 350 UK manufacturers which employ their own salaried research and development specialists. Independent professional inventors use their personal contacts to sell their ideas to toy companies and design firms.*
The relatively short product lifecycles of toys, as well as constant competition for children’s preferences with other products, means innovation is a vital element in the business models of toy manufacturers. For them, staying on top of shifting tastes and trends is a perpetual challenge.
What are the potential areas of eligibility?
A vast range of toy and hobby sector activities are likely to produce R&D tax relief eligibility. These could include:
PRODUCT DEVELOPMENT PROJECTS aimed at:
- Making products safer for users (reducing detachable components, making electronics safer)
- Introducing new materials into the manufacturing process (such as using recycled raw materials (cardboard or composite wood) or replacing plastic (especially single use plastic
WASTE MINIMISATION PROJECTS:
- Eliminating process waste by reworking rejected materials.
- Making processes more efficient so as not to produce waste.
ENERGY REDUCTION PROJECTS:
- Eliminating the need to use light or heat for curing of adhesives or inks
WATER REDUCTION PROJECTS:
- Within manufacturing or projects to improve the waste-water treatment before it is returned to the water system.
PROCESS INNOVATION PROJECTS, including:
- Automating processes by introducing advanced manufacturing technology, robotics or new sensor technology to control processes and process lines.
- Design for Manufacture: changing the designs to make manufacture faster or more efficient (improving machine tools or holding fixtures, changing designs to eliminate unnecessary
- Digitalisation: developing or integrating new software to control and manage manufacturing processes
- Projects aimed at removing hazardous materials or chemicals from processes or products; potentially toxic inks or adhesives.
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?
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, in compliance with all rules and regulations.
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.