R&D tax credits are a Government incentive that rewards innovation. So are you benefitting? Kene Partners reckons more printers should be.
It’s 20 years since the UK’s R&D incentive began, but here’s betting a lot of qualifying print companies know nothing about it. With so many of you reimagining your business it’s time for another look-see at a scheme that could bring you financial rewards for being innovative.
The UK’s R&D incentive began in 2000 and has remained consistently active and encouraged by the UK Government ever since. The intention is for this financial pot to act as growth-fuel for companies taking a risk with their development work. This work can include paid projects for clients, or in-house development for a company’s own benefit. The bottom line for any business wanting to get a share of this cash-pot is to show that its spending money on work which seeks to overcome ‘scientific and/or technological uncertainty’.
The R&D guidelines are intentionally broad so as to accommodate all kinds of innovation - and, crucially, your R&D work need not have been ultimately successful in order to qualify. You also needn’t necessarily have developed an entirely new technology or product -you might’ve made improvements or modifications to existing systems and processes in order to meet demand and create new capabilities. Print companies are doing this all the time.
Look at how the print sector has reacted to the Covid-19 crisis and demand/opportunity for social distancing signage/products for instance. New production demands for print and signage may well have meant you’ve gone beyond conventional print processes -and this is where the R&D incentives could reward your innovation. For example, the crisis may be presenting your company with print demands that require you to modify and/or adapt existing print technologies, processes, or systems beyond what is documented or conventional. These non-routine changes and improvements may well be eligible R&D work.
Likewise, global supply restrictions may mean that your print processes and systems have had to be modified or extended in order to print onto new, different, or unconventional substrates and materials. Making fundamental changes to the underlying technology - or its processes and systems - in order to accommodate new materials can also be eligible R&D activity.
It doesn’t matter if another print company has achieved a comparable solution which serves your own project’s aims. What matters is that the other comparable solutions were not available to you, and could not be implemented or consulted in order to give you a complete solution. If you’ve worked to develop your own solution to a problem a competitor has solved, this can still be eligible R&D.
In most fields of technology - not just printing - existing products, knowledge, and theory can offer a decent baseline from which to begin your work. But then there are technical limitations that you have to work to overcome. The R&D guidelines include the development of a parts-of-a-system or process as qualifying activity. So, ask yourself:
- Am I creating new print products, processes or services?
- Am I changing an existing print product, process, or service?
- Have I spent money on this development work?
The value of your claim will depend on your company size and the type of work you’re doing. But HMRC’s most recent statistics show that the average claim value for an SME is over £50,000. Large-format print companies often undertake a greater quantity of bespoke projects - and these highly specific requirements often lead to non-standard methods being developed. This, in turn, can mean more qualifying R&D.
If you have undertaken work (either for yourself, or a client) as outlined above, it’s worth considering putting in a claim. Specialist R&D tax advisors - such as Kene Partners - can help with all the paperwork and give you a heads-up on how successful any claim is likely to be.