R&D Tax Credits in Food & Drink – Daniel James Tax

R&D Tax Credits in Agriculture

Within the food industry, there are a lot of potential opportunities for an R&D tax credit claim. For instance, it could be as simple as creating a recipe for a cake or a new technique of preservation.

The food sector can easily be worth trillions of pounds since there is a greater demand to adapt foods to make them organic, vegan, healthier, gluten-free, etc. Necessities such as these can originate both from consumers and regulators causing restrictions on the innovators to improve the food.

A good example of this would be when you see products that state “Now with 20% less sugar” or “New Recipe” on grocery shelves. This can be considered as a marketing strategy, nevertheless, there will be facts behind it. Most likely, behind the scenes, there was a sufficient amount of research and money spent to make the product much better, so as to justify the claims placed on the packaging.

Check if you are eligible for R&D Tax Credits

By answering the questions below we can provide you with personalised online eligibility check.

Step 1 of 6: Your Company Details

Is Your Business a Limited Company?
Research and development tax credits are only available for limited companies registered in the UK.


Pressures in the Food & Beverage Industry:

  • Commercial Aspects – This type of pressure refers to making enhancements such as increasing shelf-life of products. This is very valuable for supermarkets since they can’t afford to display out of date stocks on the shelves.
  • Legal Modifications – Obviously, it is mandatory for food and beverage innovators to make some changes if they are required by law. In case there is a specific standard set by the government, then it is essential that it should be met by the developers. A good example of this would be the implementation of the sugar tax. For instance, for carbonated drinks that contain more than 5g of sugar per 100ml, there will be an additional tax added to the product due to the amount of sugar being used. This is just one example wherein several R&D studies were performed so as to satisfy the laws without changing the taste of the product.
  • Trends with Clients – There are several questions that you could take into consideration with regards to this factor. For instance, what products can be turned into vegan? or what should be added to the free-from part? When it comes to trends, there are a lot of options which food companies can adapt to. If these companies failed to consider these factors then most likely, we are still eating tinned, processed foods.
  • Environmental Circumstances – Similarly, there are a lot of questions surrounding this factor. For instance, how can you make your ingredients promote fair-trade? or how can you make your packaging eco-friendly? or perhaps how can you make it cruelty-free? These are just some of the things that you should consider when doing Research and Development.
  • Manufacturing Process – During the manufacturing process of food and beverages, there are various forms of equipment and methods used to guarantee that your product is made of top quality. If you are a manufacturer, then this implies that you have to offer new machinery to cope with the high demand while improving the standards when working on a large scale. This can guarantee you that your final product will always be consistent.

Do I qualify for R&D in food and beverage?

Product Development:

One of the most common projects that can qualify food companies for R&D tax credits is developing food products. The following are just some examples of processes that can qualify for an R&D claim.

  • Creating a more sustainable design for packaging.
  • The expenses on ingredients used as well as heat and water.
  • New methods for waste reduction.
  • The cost of labour for the staff doing the experiments.
  • Testing the new equipment, for instance, developing new food processing methods.
  • The time spent in adapting recipe formulation – for instance, creating gluten-free product variations, experimenting with lower sugar or salt content, or developing recipes with fewer additives.

Process Adaption:

Modifying the processes of how the food or beverages are produced is another aspect in which you can make an R&D claim. Some examples of process alteration in the production are placing an additional belt or an additional robotic arm to assist in the production.

All of these factors are considered as strategies that can help the production in reducing time spent on manufacturing, minimising the cost of labour as well as in improving the overall output.