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.

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