Research and development (R&D). You may have heard of it before. But do you know what it really means? R&D is the innovative activities carried out by companies to solve unique challenges in and outside of their industry. The UK government has a powerful R&D tax credit incentive that can help you claim back on your R&D expenses.
What is R&D? And what sectors does it relate to?
R&D primarily involves researching and developing new solutions for problems surrounding processes, products or services. Many businesses also invest in R&D to improve their existing offerings. In terms of the bigger picture, R&D is instrumental in igniting industry progress and boosting the economy.
Typically, R&D projects involve:
But in practice, this cycle can be much more agile.
R&D projects can come with added risk. As with all experiments, there’s no guarantee that the work undertaken will succeed or fail.
Saying that, you’d be surprised how many industries engage with R&D. It’s not just sectors that use laboratories or have a dedicated R&D division. For example, there are many manufacturing and engineering companies that claim back R&D tax relief on large-scale innovations.
To illustrate, one manufacturing company invested a lot of time and money into exploring the sustainability of rubber. It has undertaken a wide range of projects to make rubber more environmentally friendly, all of which can be classed under R&D. Retail, hospitality, agriculture, print and packaging and construction that are getting increasingly involved with R&D projects. The scope is truly limitless.
How can R&D benefit you?
Investing in R&D helps you stay competitive and reduce the threat of new entrants. Because you’re actively looking for ways to stay relevant and stand out of the crowd as pioneers in your industry. This, in turn, can make you more attractive to investors, customers and even partners, broadening your horizons.
Plus, if you develop a successful new product or service, you can generate new revenue streams, keeping you agile and boosting your survivability. Even if the idea fails, the process in itself will teach you a lot about experimenting and testing – valuable lessons that will help you be successful in the future.
The main thing that puts businesses off investing in R&D is the initial outlay. But the truth is that thanks to the government’s R&D tax schemes, the potential to reap a significant ROI is very real.
R&D keeps you alive and thriving
R&D is more important than ever. In this highly-competitive world, businesses need to explore exciting innovations to create distinctive brands that stand out for all the right reasons.
And in doing so, they will benefit not just themselves but that of the wider economy. That’s why the UK government has upped the R&D investment form seven billion to twenty-two billion!
The likes of Recoup Capital check your eligibility for R&D tax credits and will help you process your claim in order to claim the greatest reward back on your R&D initiatives. With a 143% higher than national average claim, they can be trusted to get you the best results.
The first step is knowing if you’re eligible for R&D tax relief. There are a range of R&D eligibility checkers available to provide you with answers in just a few clicks.
Want to learn more about what R&D is and how R&D tax credits work, be sure to get online and do your research as there is some much available at the click of a button.