Article Source: IMechE
When people think of research and development, they often picture large corporations or specialised science, technology or pharmaceutical companies.
This explains why, despite the government’s efforts to encourage innovation in UK industry through R&D tax credits, only one in five businesses that can be classed as being ‘innovation active’ have ever claimed money back for their time developing new products or processes.
This could be because of the complicated nature of processing the claims, as many business owners may not understand what qualifies as R&D or how to go about making a claim. Here are four things your business could be doing to qualify for R&D tax credits – simply by continuing the work you’re already doing.
Developing technically improved products
If your business makes products and you’re working to improve them through research and experimentation, this qualifies as R&D. One surprising thing is that whether you’re successful or not in developing a new product doesn’t matter as, in the case of R&D tax credits, any time spent on the process still counts.
One company that has been successful in producing technically improved products and claiming R&D tax credits is Bee Lighting, which develops lighting for vehicles that are used on land and in the sky and sea. It has an innovative approach to work, investing in highly specialised design and engineering to produce products that exactly meet a client brief for new bulbs.
In one case, to create the right single small light for a client, it developed and tested more than 100 iterations of lens shape, 1,000 frosting effects and four ways of fixing the lens. That led to a happy client, and the work qualified for an R&D tax rebate.
Creating systems to improve service
When businesses see a new software or manufacturing development that would enable them to improve their product or service, it’s common to look at ways of integrating that technical advancement into what they do in order to improve service quality. The good news is that if you’re doing that you could qualify for R&D tax credits.
One example of a business that has done this successfully is Logistex, a leading logistics integration company. It collaborated with Pharmacy2U, a pioneer in digital healthcare, to develop an automated system to pick, pack and dispatch medicines, at a rate of more than 600 orders an hour.
The new system integrates a range of technologies, including ‘pick to light’, an automated packaging solution and twin-headed dispensing robots, all of which presented technical challenges in development. Bringing these new technologies into its offering helps move the industry forward and enabled Logistex to claim R&D tax credits.
Modifying systems to improve efficiency
Almost every business will want to improve efficiency, capacity and performance. Looking at ways to improve these won’t only increase output, sales and profits, it will also qualify the business for R&D tax credits.
Brainomix, which creates imaging software for the diagnosis of neurological and cerebrovascular diseases, identified that a lack of timely, available expertise for brain CT scan interpretation can delay stroke patients from accessing life-saving treatments. Building on the systems that are already out there, it has since developed the CE-marked, award-winning stroke-imaging software, e-Aspects.
This modification to the existing CT scan helped support physicians to deliver fast, consistent diagnoses. However, organisations don’t need to be saving lives to qualify for R&D tax credits, they just need to show how the work they have done has improved performance.
Developing bespoke solutions for problems
There won’t be many businesses that haven’t been presented with a unique problem by a client. Principally, the work that goes into developing solutions is to meet your client’s needs. But it has the added benefit that it makes you eligible for R&D tax credits.
One business that has been able to do this is 48.3 Scaffold Design, structural engineers who design and develop scaffolding systems for commercial projects. The firm believes that its work is not about generic scaffold designs, and wants to create unique systems with new solutions.
By taking this distinct approach and pushing the boundaries in its field, the business qualifies for R&D tax credits – like many others that are looking for ways to improve on current systems.