Eligibility of R&D tax relief for engineering firms

So you think that research and development is confined to laboratories full of people in white coats? Not necessarily. Many engineering companies – perhaps yours included – are constantly striving to take their products and production methods above and beyond the existing technology. This means that they’re doing R&D, sometimes without even realising it! That’s great news for innovative engineering companies because it means that many of them could be eligible for substantial amounts in R&D tax relief, providing all-important funding for continuing advances.

Jon Pitt, Financial Director at LMG Solutions says

“We were not aware of any R&D incentives that could be applicable to our company, it was clear that we should be claiming the thousands of pounds available under this government scheme, but we could not believe this applied to us”

Worried that your company isn’t eligible for R&D tax relief?

You’d be surprised at the range of engineering companies we already work with at Jumpstart, not to mention all the eligible projects we find in the most unlikely places.

“Our perception has quite considerably changed since using Jumpstart, with our new understanding of R&D particularly emphasising how we were incorrectly limiting what we could claim. We learnt that we could claim for our commercial projects, provided there wasan R&D element and actually see a reward from them” says John Muggleston, Company Secretary at Spooner Industries Ltd.

Of course companies that manufacture specialist mechanical or chemical products are undertaking activities eligible for R&D tax relief. The design and development of pumps for the oil and gas industry or components for industrial tooling, for example, are likely to involve clear advances in technology in those fields. Similarly, it’s probably not that surprising to find eligibility in the manufacture of industrial cleaning solutions, with a continuing need to develop safer, more effective products.

But what about those manufacturing companies making the everyday essentials we all use in our homes, such as boilers, blinds and glazing? Would you expect to see eligibility in these cases? You should, because even though these companies are producing commonly used items, they’re often required to push the boundaries and advance the technology in their field to ensure the very best results.

What about the manufacture of specialist equipment, such as bagpipes and curling stones? Surely there can’t be any eligibility here, in manufacturing items that have traditionally been produced in cottage industries? Well, amazingly, yes there is! Where enterprising companies have taken a new direction to produce specialist items to the same traditionally high standard, but with new twists and in greater quantities, R&D is an absolute necessity.

Daniel Orwin, Group Finance Accountant at DB Gears admits,

“I was a bit sceptical at the beginning, but not about Jumpstart. We had read the guidance on the legislation but it was not until Jumpstart came to work with us, that we had our eyes opened. They altered our mind-set with their technical approach, and gave us a different understanding on what qualifies for R&D. We had been viewing a claim as something unique and ground-breaking within the field as a whole, but in fact we quickly came to realise that it was about the technical advances we had been making.”

Is you engineering company eligible for an R&D rebate

 
The chief point to take out of this is that whether you’re manufacturing window-frames, boilers, widgets or anything in between, you too could be doing R&D. No matter how ‘normal’ or weird and wonderful the products your company makes, if you’re pushing back the boundaries, advancing technology and thinking outside the box you could be eligible to apply for R&D tax relief. In which case, there could be a big cheque with your name on it! And if it turns out that your company isn’t in fact eligible, you won’t give us a penny. So you see, you’ve nothing to lose and everything to gain.

For a free consultation and analysis of the potential returns you might expect, call Jumpstart on 0131 240 2900, quoting Process Industry Forum.