Almost any type of engineering firms could be eligible 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 100% 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.