Almost any type of engineering firms could be eligible to claim R&D Tax Credits providing that their projects and activities meet the criteria and they pay Corporation Tax in the UK. Engineering subsectors that are rich in opportunities for claiming include:
What types of engineering projects and activities qualify?
The government’s guidelines for what activities qualify for R&D relief are broad, though each claim will be assessed by HMRC on its own merits. It is often not a simple matter to determine what you should and should not claim for. As a baseline requirement, a qualifying project must seek an ‘advance in science or technology’ and have ‘had to overcome technical or scientific uncertainty’.
In the engineering context, your project stands a good chance of qualifying if:
- It involves creating new designs or prototypes
- It involves the use of new materials or a new combination of materials
- It results in an appreciable improvement to an existing product or process
- It results in streamlining a process through automation
- It is implemented in a unique or challenging environment
- It involves a new or improved design of machinery, component or electronic products
- It involves going through multiple technical iterations before going into production
These are just a few typical examples though they should not be interpreted as projects that will automatically qualify.
Tips on claiming R&D tax credits in the engineering sector:
- You are able to submit claims for projects that took place up to 2 accounting periods ago and all subsequent projects. Any projects that took place before that will not be eligible.
- You can claim once a year for future eligible projects
- The value of your claim will depend on a number of factors. The main factor is expenditure – the amount that the eligible activities cost your firm
- You can expect to claim about 26% of qualifying expenditure
- Qualifying expenditure can include salaries, contractor costs, subcontractor costs and consumables / scrapped materials/ prototype coss
- The qualifying activities can take place anywhere in the world, but must be funded by a UK-registered business
How we can help
By choosing Innovation Plus as your R&D tax credit claim partner you will benefit from:
- An expert team that will take care of the entire claim process and build an optimal claim around all your eligible engineering projects
- The assurance that your claim will be successful. We have maintained an exceptionally high success record for claiming on behalf of our clients since 2009.
- An optimal claims process that will maximise the value of your claim
- Our in-house financial, legislative and technical experts, all under one roof
- Being able to leverage our excellent working relationship with the R&D tax inspectors underpinned by the excellent quality of our claims
We can give you a definitive answer on your eligibility and the overall R&D tax position of your engineering firm through an obligation-free phone consultation – simply contact us to arrange this.