The food and drink sector in the UK is vitally important for the economy. Moreover, it is likely to be a sector to experience significant growth in the future. However, it cannot grow without the correct access to necessary funding. Many business owners also find it difficult to raise finance because of their lack of financial experience. They didn’t get into business to become a financial expert.

The food and drink industry in a nutshell

In the EU, the food and drink industry boasts the largest sector in terms of jobs and value added. The industry also trades strongly against non-EU countries. Food and drink exports within the EU have doubled in the last 10 years. This has generated over 90 billion for the EU. The single market has offered great opportunities, further harmonising European Union food legislation. Nevertheless, there are particular challenges in both European and international markets. The EU food sector is becoming more competitive thanks to work through the European Commission and the single market for food. New trade opportunities are also becoming available through trade negotiations with other countries.

Why is finance important to the success of the food & drink industry? 

Finance is vitally important to the food and drink industry because:

• It provides strong imports to other countries within the EU
• It provides employment for millions of UK residents and is a highly skilled industry
• Improvements are being seen regarding environmental impact and response to health demand
• It innovates new products and services

A few different finance options

There are a few options available for the food and drink manufacturer to consider when they look at the cash they may need to support their plans –

Founders, friends and family: Common source of funding common in young or start up businesses

Equity investors: Individuals that provide money to the business in return for shares in business.

Business angels: Professional investors who have prior experience in investment and running businesses.

Venture capital: Well funded investors who provide equity to private companies with the long term view that the business will grow, become profitable and can ultimately be sold.

Crowd funding: Large group of individuals invest small amount of money, allowing companies to access funding that wouldn’t otherwise be available.

Mezzanine funding: Falling in between bank debt and equity investment, mezzanine funding is normally granted when the risk of the funding requirement is higher than what the bank would accept but more certainty around the proposal than would require equity investment.

Bank funding: Comprising loans, asset finance and invoice finance.

Grants: Money offered by the public sector for causes that are in need of assistance.

Have they considered R&D tax credits?

The government is now providing tax relief to innovative UK companies in the form of R&D tax credits. On average, companies can claim back 33p for each £1 spent. Which applies to the development of new products, processes and enhancement of existing ones.

An overview of what they are

Government tax relief which rewards UK companies which innovate each and every day. Specifically, ones that are developing new products and processes or improving existing ones. Importantly, you do not have to be a science type business or lab environment to be eligible. You can claim R&D tax credits against things such as: 

• Development of new products 
• Changes to an existing product
• Implementation of new machinery or processes
• Changes to packaging
• Changes or innovation in food storage

Why they should use an expert?

Although it is very much possible to do your own R&D claim, just like you may be involved in many parts of your business such as sales, finance and marketing, it is always worth hiring the services of a professional if you are considering completing something you are in-experienced in. Such activities are obviously best left to the experts. Either by hiring extra members of the team, or by outsourcing them.

If you are willing and capable of organising your own R&D claims then great. However, it is understandable that most business owners will not know where to start. We are highly experienced in this area and as such, are able to make the entire process easy and simple. 

Why choose Lumo?

Lumo help you claim the R&D tax credits you are entitled for, in a hassle-free and easy to understand way. We are able to quickly assess your situation, avoiding the use of complicated jargon. Instead, we provide a simple and honest review of your current situation. Lumo is one of few companies that only do R&D tax credit services. This means that we know this subject in significant detail. We take the legwork out of the process, knowing what makes a successful claim, and what doesn’t. There are few businesses that are able to claim the R&D tax relief they are entitled to. This may be because they are unaware of how to claim. Or may attempt to claim, but present their case incorrectly. Lumo present your case in the best way possible. Making your chance of success even better.