If you’re a forward-thinking brewery, did you know you could qualify for R&D tax credit? We’ll drink to that!

Join us in this blog post as we explore how breweries could be eligible to enjoy the next round of research and development on HMRC...

What are R&D tax credits?

R&D tax credits are government funded financial subsidiaries for any company investing in research and development (R&D) within their field. Businesses are able to claim back a percentage of expenses associated with innovation, serving as an incentive for British businesses to continue leading the way.

How can breweries qualify?

While the above might conjure up images of scientists, labs and impossible sums, the fact of the matter is that innovation comes in various forms - meaning it may very well already be going on in your brewery!

For example, craft beer production has been a growing market in the UK and indeed worldwide in recent years. This process often involves experimenting with new recipes to create a unique taste, then developing specific brewing processes to ensure consistency in taste across batches scaled in quantity. Providing your approach meets certain criteria, this project would be eligible for R&D tax credit funding.

What is the criteria?

Anyone can throw together some out-of-the-box ingredients with barley, water, hops and yeast and claim they’ve invented a new craft beer (our pineapple and oregano ale hits shelves soon!). But to qualify for R&D tax credits, there are certain factors that need to be addressed.

Firstly, you’ll need to prove your project has been working towards a defined, specific goal. Throwing together random ingredients in the name of innovation isn’t going to suffice here (which means you guys will have to wait a little longer for that pineapple and oregano ale…) - it’s all about proving your experimentation has been methodical.

You’ll also need a ‘competent professional’ leading your project, meaning you home brewing enthusiasts won’t qualify either, unfortunately! According to the HMRC’s definition, this person needs to have extensive experience and qualifications within the relevant field, meaning it’s important your project leader really knows the chemistry of brewing. Spending a years’ worth of Friday nights in the pub refining their beer palate won’t cut it in this case.

While finding exciting new flavours for your brewery’s craft beer could be exactly what you need to put you on the map, this experimental approach to brewing can be a serious drain on ingredients, equipment and, ultimately, resources. Worst of all, there’s never any guarantee of a return on your investments.

With this in mind, R&D tax credits can provide welcome respite from the financial strain that comes with being a forward-thinking brewery. To learn more about how you can apply, get in touch with Lumo today.