Research and development (R&D) tax credits provide businesses with a great opportunity to subsidise any expenses that have occurred during the pursuit of innovation.
But this doesn’t mean you need to don your lab coat to qualify. On the contrary, did you know your furniture manufacturing business may be eligible to claim?
For your furniture business to qualify for R&D tax credits, you need to be able to prove you’ve faced a number of requirements head on. Do so successfully, and you may be able to claim back up to 33% of your costs - regardless of whether the overall project proved successful.
With all of that in mind, today, we’re lifting the lid on 3 considerations you should have in mind when exploring whether your furniture manufacturing business qualifies for R&D tax relief.
Do you have a qualifying purpose?
Let’s begin at the beginning. Your first consideration should be regarding the purpose of your project - what is the goal and why? Ultimately, you need to ensure your research is driven by the desire to improve your product or process to increase performance and quality.
When it comes to applying this to furniture manufacturing, the possibilities are endless. From researching new equipment that helps streamlines the build and assembly of furniture to designing and developing new prototypes and samples, there are plenty of ways to ensure this first box is ticked from the off.
Have you utilised science and technology?
Eligible R&D projects must prove that they have utilised core scientific methodology and knowledge in relevant areas - whether that be chemistry and biology or engineering and physics.
Don’t worry - this doesn’t mean you have to start dusting off the test tubes. Instead, consider how you’re likely to utilise scientific knowledge and technologies as part of your pursuit of innovation. Whether it’s experimenting with alternative designs to optimise energy efficiency or implementing new processes to enhance safety, there are countless different avenues to explore here.
Have you experimented with an element of uncertainty?
R&D projects must approach the end goal through experimentation, proving they’ve faced a degree of uncertainty along the way. So, look to continually develop prototypes and utilise the tried and tested method of trial and error in your efforts to overcome uncertainty. This could be done through experimenting with different materials, different manufacturing methods or different designs to name just a few of the possibilities.
The uncertainty you face is loosely defined depending on the type of research and development you’re undertaking. There could be uncertainty regarding the most efficient design, the most effective methodology or the optimal performance capability - it’s whatever is most relevant to your manufacturing project.
From improved sustainability in your manufacturing processes to improved performance from the end result, there are plenty of research and development projects your furniture manufacturing business can pursue that qualify for R&D tax relief.
Whatever direction you opt for, ensure you keep these considerations at the forefront of your mind to increase the likelihood of a successful relief claim.
Need a hand filing your claim? Don’t hesitate to get in touch with Lumo today. Our R&D tax claim experts will help to guide you through the process with minimal fuss.