Food and drink sector is failing to access R&D tax credits
23 Jul 2023
Just 1% of research and development tax claims in 2022 originated from the food manufacturing sector, according to published statistics, claim tax advisers Research and Development Specialists Ltd (RDS).
Although the number of food companies claiming R&D tax credits increased compared to the previous year, the average claim value remained low, around €21,573, likely due to the impact of the COVID-19 pandemic.
Out of the total 78,825 claims in 2022, there were 810 R&D SME claims from the accommodation and food sector, amounting to approximately €17.4 million, representing just 0.4% of the overall €4.89bn claims.
The Research and Development Tax Scheme administered by HMRC was designed to stimulate innovation and support businesses in bringing new products and services to the market. However, many companies, especially those in the food and drink manufacturing industry, are not participating in the scheme due to factors such as time constraints, lack of awareness, or doubts about eligibility.
RDS is urging food and drink firms to explore the opportunity citing its own successful claim of£55,000 for a company involved in craft brewing equipment development.
Managing director Mark Joyner pointed out that many food companies conducting research into health, ingredients, or developing new equipment or processes for manufacturing could be eligible for tax credits.
“We’ve previously had success within the food and beverage sector, finding that companies working in this area have invested in qualifying activities like conducting research into health and ingredients or developing new equipment or processes to improve the scale, speed or efficiency of manufacturing, bottling, packaging or canning,” said Joyner.
“The research and development related to this then makes them eligible for tax credits, but that’s not widely known. Lots of companies are missing out.”
