R&D tax credits for engineering

Overview

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:

• Aerospace & Avionics
• Architectural Engineering
• Automotive Engineering
• Biochemical Engineering
• Building and Construction Engineering
• Chemical and Engineering
• Civil Engineering
• Defence Technology Engineering
• Electrical and Electronics Engineering
• Environmental Engineering
• Geotechnical Engineering
• Hydrology Engineering
• Manufacturing Engineering
• Marine Engineering
• Materials Engineering
• Mechanical Engineering
• Petroleum, Oil & Gas Engineering
• Plant Engineering
• Power Engineering
• Rail Engineering
• Software Engineering*
• Surveying Engineering
• Systems Engineering
• Telecoms and Networks Engineering
• Transportation Engineering

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.