It has been the opinion of many that the manufacturing and engineering sector within the UK is on the decline. However, did you know that the UK remains the 9th biggest manufacturer globally, and continues to grow every day? It could be that we are at the edge of the ‘fourth industrial revolution’ as advancement in digital technology is creating exciting new concepts such as ‘the internet of things’ and cloud computing. UK manufacturing and engineering sector: a brief overview
It is fair to say that the manufacturing and engineering sector in the UK is critically important to future sources of income and ultimately, the creation of better living standards. The sector boasts good levels of pay, along with good levels of innovation, and exporting. Over recent years, manufacturing exports have risen. Which has been possibly driven by global demand. Particularly EU markets, which account for 48% of manufacturing exports in 2017.
Why is finance important to the success of the manufacturing and engineering industry?
The role of the manufacturing and engineering sectors for the UK economy is vitally important. As well as for the well being of society. This industry provides a range of highly skilled rolls for many UK businesses. Along with providing solutions to important challenges faced worldwide. Although advancements are being made in technology, changes in politics and the economy could be restricting growth in skills development within this important area.
What are the current finance options for the manufacturing and engineering industry?
There are a few options for the manufacturing and engineering industries to raise cash for their next project, including –
Asset finance through hire purchase. Hire purchase can be an easy way to spread the costs. A fixed rate of interest is paid and normally, payments are made each month. The rate of interest is normally fixed.
Asset funding via finance lease. This option is ideal for purchasing new machinery and equipment. The equipment would be hired to the business, remaining the property of the finance company. Payments and interests remain fixed throughout the whole contract. However, VAT payments are made monthly, rather than at the end of the contract.
Annual investment allowance. Costs associated with buying machinery is offset against profits so that corporation and income tax are kept minimal.
What are R&D tax credits?
They are a tax relief provided by the government which reward UK businesses demonstrating innovation every single day. Companies can show innovation in a number of different ways. Such as the development of new products and processes. Or perhaps the refinement of existing ones. Did you know that for every £1 you spend, you can claim back as much as 33p as R&D tax credits?
Why should I consider them?
Because there are probably lots of things going on within your business that would make you eligible for claiming them. Typically, engineering and manufacturing businesses are involved in a number of activities that are eligible for R&D claims. Such as:
- Developing new drugs
- Changing processes for the manufacturing of drugs
- Creation of new facilities or production lines
- Authorisation of a new drug to be sold
- Scaling up existing processes
- Modifying existing products
- Creating hardware and software
Why should I use an expert?
Of course it is possible to complete an R&D claim yourself. However, are you fully aware of what you are doing? You may feel that if you can work on other parts of your business such as sales, finance and marketing, you can easily work through your R&D claim. However, if you lack experience in this area, we would definitely recommend leaving this to the experts.
Why should I use Lumo to do my R&D tax credits?
We only do R&D claims. Nothing else. As a result, we are experts in this field. With experience of helping over 200 companies complete their claims. Recovering over £15m over the past decade in tax relief. We are fully supportive of innovation in the UK and want to help businesses maximise their claims as fully as possible. We make the entire process hassle free. We really get to know your business, which allows up to put together a really strong claim. We then work with HMRC on your behalf. Meaning we do all the legwork. Giving you time to work on other important aspects of your business.