Research and development (R&D) tax credits offer a powerful incentive for manufacturing firms to undertake eligible projects in the pursuit of innovation (and an injection of cash). But before getting the ball rolling with your firm’s R&D, it’s important that you first understand the types of projects that qualify.
That’s why, today, we’re taking a closer look at some of the ways R&D eligibility criteria could apply to your manufacturing business. Starting with a quick recap of the boxes you need to tick to receive funding, we’re sharing a range of ideas and examples to help you ensure you’re meeting all of the necessary criteria.
R&D eligibility
The primary purpose of research and development schemes is to advance industries through achieving a resolution to scientific or technological uncertainties.
These uncertainties can be broad in definition. From new products to improved systems, the fundamental requirement is that the project tackles an industry problem for which the solution is not yet known. It’s important to note that this doesn’t need to be successful in order to qualify for funding. The approach must simply aim to establish an advance in industry knowledge and an ‘appreciable improvement’ on the relevant product, tool or process.
Eligibility in manufacturing
When it comes to the manufacturing industry, the scope for research and development is huge. In order to successfully improve the competitive and commercial capabilities of manufacturing firms, manufacturers should look to assess where R&D would be most beneficial for their business.
This will provide you with two different routes to choose from:
- Look to innovate a brand new product or approach
- Look to innovate an improvement on current products or approaches
Whichever road you choose to travel, look to focus on the following four areas of manufacturing:
Process level technologies
Research and development into process level technologies could include the implementation of new manufacturing processes, which covers a whole host of innovations from materials and coatings to methods and associated practices.
Alternatively, you can look to make fundamental improvements to existing processes. To establish the intent to assert ‘appreciable improvement’, focus on improvements that deliver substantial increases to productivity, efficiency, quality or sustainability.
Machine level technologies
Manufacturing firms can also look to conduct R&D around machine level technologies to improve their manufacturing tools and equipment. Again, this could come in the form of an increased focus on improving sustainability, efficiency, capacity or capability.
You could also look to develop new machinery, apparatus or equipment, including tools to assist more contemporary methods of manufacturing.
System level technologies
Research and development into system level technologies aims to establish industry-wide innovation. As such, this focus could include any critical enterprise processes such as supply chain management and disruption systems.
Elsewhere, advances could be made in information technologies such as networks and sensors, improving the quality and efficiency of systems and facilities. The focus of your R&D could alternatively be on the improvement and implementation of collaborative technologies that enable better prototyping and tooling.
Environmental and societal technologies
Finally, your manufacturing firm could look to research and develop innovative environmental and societal technologies. This includes any technologies that aid in achieving an improved working environment - whether through easier health and safety implementation or, at a more grassroots level, an increased focus on technical and skill-based education.
It’s no exaggeration to say that the possibilities for R&D in the manufacturing industry are extensive. Now that you know whether you could be eligible, the next step is to begin your application. For a helping hand along the way, get in touch with Lumo. We’re always happy to help when it comes to making the claim process as quick and hassle-free as possible.