R&D In The Food & Beverage Industry

A new food product is one of the most obvious projects in which R&D will be involved. Market research is a notable exception to what may qualify as R&D for tax purposes, but many other parts of the new product development process may be eligible in an R&D tax credit claim.

The latter is where the majority of any R&D claim will be.

Also worth noting, if a restaurant is looking at, or has already done a new fit-out, this too will be eligible for an R&D claim, as will menu development.

Here are the main areas containing R&D:

• Improving nutritional value within food content;

• Development of ingredients or food formulas that are both new and sustainable;

• Mitigating allergies such as dairy and gluten whilst maintaining taste;

• Development of food handling i.e faster, healthier and safer;

• Adapting ready meals to a healthier option with fewer preservatives and less salt;

• Improving shelf-life through variation of processing, storage temperature and packaging;

• Developing more efficient ways to minimise contamination, waste and spoilage of products;

• Improving the taste, texture and consistency of food, or;

• Scaling up sample batches in a kitchen test environment to full production speed and quantity.

Despite the large amounts of R&D activity happening within the food sector, very few businesses are actually claiming this tax rebate.

This is mainly due to the lack of education on the business owners' part. Through no fault of their own, they simply think they don’t qualify due to the lack of information at their disposal.

Marketing strategies on social media posts, emails and messages on LinkedIn will be instantly dismissed. When in fact, they could provide the business owner being approached with a considerable cash injection into their business.

If you are a brand producing a product for wholesale, or retail use, there will be considerable R&D available to you.

If you are a farmer producing the raw materials for the brand to turn into goods, there is also R&D within your sector too.

If you are then a restaurant, farm shop, or any other similar operation turning the raw materials into dishes, developing menus, or expanding your operation, there is also R&D available to you.

In fact, R&D runs through the complete production cycle, from farm to shelf.

With investment heavy within the food sector, R&D can provide a valuable cash injection to help you further expand, or develop your operation.

Every pound spent, 33p can be claimed back.

Expenditure areas to look into:

• Staff salaries

• Freelance, subcontractors, or consultant fees

• Any machinery investment

• Samples made or purchased

Time is where the most R&D will be found, the people you employ, or the consultants you use. From designing products, improving them, sampling and sourcing, all these areas are where R&D can be found.

Find out how much you could claim and speak to one of our experts today.