What qualifies as R&D activity in the food industry?

R&D tax credits for the food industry

R&D tax credits reward innovation. The scheme also provides a way for any organisation investing in research and development to create an income stream to continue to support this going forward. It is often assumed that R&D tax credits are only designed for those in industries like technology, but that couldn’t be further from the truth. Companies in the food industry can also see R&D activity rewarded – but what does that look like?

R&D activity in the food industry

Innovation is a key component for businesses in the food industry. The global sector is worth trillions and continues to expand every day – we all eat, so in a way, it’s a captive market. There is constant pressure to evolve products and produce and to develop options for consumers that meet expectations around weight loss, health, sustainability, etc. That’s why there is so much R&D activity in the food industry – and why so many companies in this sector could be eligible for R&D tax credits.

What drives R&D activity in the food industry?

There are many different factors at play, but research and development is frequently focused on goals such as making food healthier, more sustainable, better tasting, fresh for longer, and more efficiently processed or creating new products, such as plant-based alternatives to meat. The driving factors for each business will be different, but the need to be more commercial is always a key influence. Whether that’s improving a product’s shelf life or production efficiency. Legal and regulatory change can also trigger the need for R&D activity across the food industry, as well as responding to consumer trends or the desire to appeal to certain demographics, such as Gen Z. Sustainable and ethical drivers are also key today, as this has become a top priority for many consumers.

Examples of what qualifies as R&D activity in the food industry?

  • Developing new products – Market research won’t qualify as an R&D activity here but there are plenty of other activities that will, including time that is spent refining recipes, experimenting with equipment, as well as the cost of staff, including plant labour for R&D trials.
  • Process change – It may not be obvious where projects focused on process change could be eligible for R&D tax credits. However, there is likely to be large-scale testing before any process change can be implemented, and that’s where R&D activity may be found, for example, in the cost of ingredients used to test process change, in power and water.
  • Changing recipes – Existing recipe change can be just as valid an R&D activity as developing new recipes, and a claim could cover everything, from staff costs to energy costs.

There are many examples of R&D activity in the food industry that could make a business eligible to claim R&D tax credits.

Apply for R&D Tax Credit Loans with SPRK Capital

Every £ spent on R&D has an immediate and long-term impact on your business. By using R&D tax credit loans, that spend can stretch further, resulting in either 20% more generated in R&D expenditure and an increased refund of 10% or it will leave you requiring 18% less capital to achieve the same R&D expenditure. Apply for your R&D Tax Credit Loan today.

 

More recent posts:

  • R&D Tax Credits

    Where to Start with Your R&D Tax Credit Application

    R&D tax credits for the food industry R&D tax credits reward innovation. The scheme also provides a way for any organisation investing in research and development to create an income stream to continue to support this going forward. It is
    Read more
  • Innovation Term Loans

    Is Venture Debt Appropriate for Innovation Funding?

    Venture debt is a specialised form of debt financing geared towards venture-backed companies that may not yet be profitable but show high growth potential. It's typically provided by specialised banks or non-bank lenders and is structured as a term loan or revolving credit facility.

    Read more
  • R&D Tax Credits

    Leveraging R&D Advance Funding for Better Cash Flow

    Maintaining a robust cash flow is as challenging as it is critical, especially when venturing into the territories of research and development (R&D). R&D advance funding is a strategic financial tool designed to alleviate the pressure on your cash reserves and fuel your innovative projects.

    Read more
  • Information

    From Tax Reliefs to Tech Reforms: Our Analysis of R&D Changes in 2023

    As the innovation space continuously evolves, Research and Development (R&D) tax reliefs in the UK have been a consistent ally for companies pushing the boundaries of innovation. The year 2023 has held significant shifts in these reliefs, marking a pivotal moment for businesses involved in R&D activities.

    Read more
  • R&D Tax Credits

    R&D Tax Claims: Insider Tips to Maximise Your Claim

    Businesses making an R&D tax claim have the potential to receive transformative funding. However, it’s not always an easy process. The application can be complex and requires precision, and HMRC has recently cracked down on those R&D tax claims that contain ineligible projects, even by mistake.

    Read more