R&D Tax Credits in the Hospitality Sector – Daniel James Tax

R&D Tax Credits in the Hospitality Sector

Businesses in the UK are having the perception that Research and Development are only intended for scientists as well as those people who are designing specialist technology, nevertheless, this is not actually true.

It seems that R&D has been underused in the hospitality industry. In fact, based on a study, 3 out of 5 restaurant managers does not have any idea about this! This is where the problem comes since there are numerous R&D activities that occur behind the scenes in hotels, restaurants, and other similar businesses, that were never claimed for.

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.


So… what is R&D?

Take note that Research and Development are all about uncertainties. If you are initiating the process of researching or developing, then you could potentially be eligible for a claim.

One good example of R&D in Hospitality is when you design a new system which can prevent the gluten-free products from getting close to non-gluten-free products.

Unfortunately, only 5% of eligible limited companies were able to make R&D claims, as a result, there are billions of pounds of tax relief that are left unclaimed each year.

What makes me eligible?

A company in the Hospitality industry can only be eligible if it can meet the following conditions:

  • Your company should have spent money on these projects.
  • Your company should have performed research and development in new processes or products.
  • Most importantly, you should be a limited company in the UK that is subjected to corporation tax.

What are examples of projects that can be claimed within Hospitality?

  • Products – You can make a claim if your company has spent a certain amount on researching or developing your very own cleaning products, or any other related products, for instance.
  • Reducing Energy Consumption – Your company could make an investment aimed at reducing your carbon footprint and it should have been specifically developed for your company.
  • Structural – Your company could put into place some unique construction processes.
  • Databases – If your company has developed a unique database used for tracking how well a certain dish is performing, for instance, then this can be considered as R&D.

These are just some examples. Also, keep in mind that the rules of R&D are not severe, they are properly put in place so as to refund and reward those companies which are dealing with some uncertainties. Ultimately, your R&D projects do not have to be successful either, since you can still be eligible for a refund even if your project was not successful.

Did you know?

  • Ever since the legislation was introduced in 2002, over £27bn has been claimed from HMRC.
  • When it comes to the money spent by the company on R&D projects, there is actually no minimum or maximum amount required in making a claim for R&D tax relief.
  • Even for those companies who are in loss-making, the legislation can ensure that they can still obtain cashback when performing qualifying R&D work.