Manufacturing and engineering

Manufacturing and engineering projects can qualify for R&D tax credits

Typically those product and engineering or manufacturing process development projects that may qualify for research and development (R&D) tax relief include the following items:

Innovative product development using computer aided design tools;
Development of second generation or improved products;
Tooling and equipment fixture design and development;
Development of unique computer numerical control programmes;
Design of innovative programmable logic controllers;
Design of innovative manufacturing equipment;
Prototype development and three-dimensional solid modelling;
Development of computer models;
Design and development of cost-effective and innovative operational processes;
Integration of new materials to improve product performance and manufacturing processes;
Evaluation and determination of the most efficient flow of material;
Design and evaluation of process alternatives;
Design, construction, and testing of product prototypes;
Increase in ease of operation or suitability of manufactured products;
Development of processes that would meet new or changed regulatory requirements; or,
Streamlining of manufacturing processes through automation.

Activities that can be included in an R&D Tax Credit claim

In terms of qualifying a claim, the following activities would be considered eligible for inclusion in a claim for R&D tax credits:

Definition of technical objectives;
Identification of uncertainties;
Feasibility studies;
Review of new and competing technologies;
Formulation of project objectives;
Analysis, design and development of the technology/science;
Production of technical specifications or other documents to explain and support the R&D project and advancement;
Testing of the product, process or software;
Planning and management of project(s);
Monitoring and evaluation of outputs.

In addition, certain support activities may qualify for inclusion in the claim for R&D tax relief, such as:

Administration, finance, and human resource (HR) support services specifically essential to undertaking the defined R&D activities;
Learning and development (L&D) activities needed to support the R&D.

R&D expenditure claimable for manufacturing and engineering projects

Claims for relief can include on costs that have been funded from the Profit & Loss account. In certain circumstances claims can include capitalised expenditure (providing that the assets purchased have been classified as Intangible Assets). The main expenses that can be claimed are:

Staff costs (gross pay, employer’s NIC, employer’s pension contributions, and reimbursed expenses relating to R&D activities);
Agency workers (externally provided workers);
Subcontractors/freelancers;
Software license costs; and,
Consumable items (heat, light and power, and materials and equipment used in or transformed by the R&D process).

Staff costs that can be included in an R&D Tax Claim

It is not uncommon for an R&D team to consist of many managers and operatives from various parts of the business. The R&D project team may include board level directors, the R&D Manager, Manufacturing staff, a Lead Developer, Engineering staff, Project Managers, Co-ordinators, Quality Control and Testing specialists, Operatives, and Cost Accountants, as well as members of the management support teams e.g. HR and L&D.

By profiting from our specialist knowledge and significant Board level experience, our clients can be sure of maximising their R&D tax relief claim. Amolo Group advisors identify, define and describe R&D tax relief claims that are several times higher than those claims prepared in-house or by generalist accountants. We produce evidence based company reports to support claims.

Why clients choose Amolo Group to advise them

No work starts until the client has formally engaged us in writing.
Our advisors adhere to the Code of Conduct and Practice of the Chartered Management Institute.
We appoint a supervising project manager to oversee the claim process and to liaise with the client on all aspects of the claim.
We appoint technical/industry specialists to the team that will process the claim.
We advise on all aspects of the R&D claim, from start to finish.
We make sure that HMRC will understand the details of the projects identified.
We adopt a right-first-time approach.
We can maximise R&D claims because our specialist advisors are able to identify, define and describe qualifying projects, and all eligible expenses.
Our advisors undertake literature searches of peer reviewed papers and work to a research methodology in order to validate the claims.
We produce detailed evidence based technical reports that clearly describe the projects. The inclusion of technical reports is essential in support of claims.
We prefer to work with the client’s own accountants to quantify and file the final claim.
No claim is submitted until the client signs of the technical report and the claim.
Our Claim Process is transparent and ensures that we are accountable. So every client always know where we are with their claim.
Our fees are payable only if the claim to HMRC for R&D tax credits is successful.