Our experience encompasses a number of sectors and businesses including the rural and agricultural sector, commercial architects, the construction industry, engineering and manufacturing, healthcare and pharmaceuticals and software development.
Find out more about our credentials below.
At UHY, we have significant experience of making successful R&D tax credit claims for companies in the agricultural sector. This includes making claims on mixed-use arable farms, livestock herds and dairy farmers who supply our supermarkets with fresh produce.
Farmers in the UK are among the most innovative in the world, constantly experimenting with new techniques and machinery to appreciably improve the performance of their farm business. For those that operate as limited companies, or as partnerships with corporate members, an R&D tax claim could historically have been missed.
Agriculture, forestry and fishing combined only made a total of 1,065 R&D claims in the 2019/20 tax year, representing only 1.3% of the total tax relief claims made in the UK. There is definitely R&D being undertaken by farmers, and also in the animal feed and seed companies. Below we have listed a range of examples of R&D activities in this sector for which either we have made successful claims, or which are HMRC examples of approved activities:
- trialling new crop varieties, where the crop is not intended to be sold to customers but testing for improved yield, disease resistance or increased shelf-life
- using new cover crops that are then sprayed with herbicide to produce organic matter and ploughed back into the field to improve soil health and reduce the use of nitrogen fertilisers
- the use of sophisticated biological pest control methods in glasshouses or field trials to protect crops from harmful insects and reduce or eliminate the use of chemical pesticides
- utilising new machinery, drones, sensors, 3D scanners or software to optimise drilling, harvesting or sorting different types of vegetable.
- selective breeding using Artificial Insemination (AI) techniques and sexed semen to improve genetic traits, such as reducing mastitis in a dairy herd, and increasing the percentage of heifers (female calves)
- feeding trials in terms of the type or mix of the feed, the timing of the feed and number of feeds and ensuring equal distribution amongst animals and correct rationing
- administering a low dose of antibiotics via the animal’s feed to promote welfare and to reduce the reliance on drugs that are equally important to human health
- testing robotic dairy milking systems incorporating sophisticated data processing systems to monitor the quality of the milk, fat-content, milk yield and individual cow health.
At UHY, we have significant experience of making successful R&D tax credit claims for Commercial Architects that are trading as companies.
The UK is well known for its exceptional architectural projects, with many innovative designs and high environmental specifications. The Royal Institute of British Architects (RIBA) have been encouraging their members to consider R&D tax credits for some time, and it is the larger multi-disciplinary firms that employ Architectural Technologists, Mechanical & Electrical (M&E) Design Engineers and Thermal Modelling specialists that are likely to have the highest R&D claims.
Commercial architects will often work on buildings that are sector specific and be in collaboration with other construction sector companies, meaning there are numerous examples of R&D activity in the industry.
Below, we have detailed a range of examples where either we have made successful claims, or which are HMRC examples of approved activities:
- designing pre-fabricated modular building structures that can be manufactured off-site with ease of build on-site
- designing high value bespoke buildings using a system of M&E components to make it CO2 neutral
- the conversion of commercial/industrial units into residential dwellings
- using new or unusual building materials, including recycled or sustainable products such as timber, glass reinforced concrete (GRC) and recovered materials
- working on challenging client demands in terms of acoustics, natural light, glazing systems or thermal requirements that might affect the building fabric
- undertaking multiple software iterations involving Building Information Modelling (BIM), Computer Aided Design (CAD), 3D modelling of structures and thermal/wind modelling.
At UHY, we have significant experience of making successful R&D tax credit claims for companies in the construction sector.
Construction is generally regarded as an industry that is under-claiming R&D tax credits, with less than 7% of the total number of R&D claims in the UK arising within this sector, despite its scope and size.
Construction has a very broad definition, including excavation, demolition and infrastructure projects as well as building, and there are numerous examples of R&D activity occurring within this industry for which either we have made successful claims, or which are HMRC examples of approved activities, including:
- pre-fabrication of components for new build residential homes off-site to reduce project time and costs on-site
- utilising new materials that have improved performance characteristics in terms of durability, life expectancy and fire protection
- using natural, ecological and sustainable timber frame systems in buildings that are energy efficient eco-homes
- renovating listed or heritage buildings where brand new wood was coated to replicate the existing aged wood in terms of colour, weathering and aesthetic appearance
- commercial build projects that have constraints such as restricted access or tight spaces that require novel techniques for building works and health and safety
- creating & deploying new Mechanical & Electrical (M&E) systems into buildings to give low or zero CO2 emissions.
At UHY, we have significant experience of making successful R&D tax credit claims for companies in the manufacturing and engineering sectors. This includes making claims in aerospace, agriculture, automotive, consumer electronics, food & drink, robotics and a range of other related areas.
Manufacturing is the second highest industry sector to claim R&D tax credits in the UK (behind information and communication technology).
We have listed below a range of examples of R&D activity impacting these industries for which either we have made successful claims, or which are HMRC examples of approved activities:
- developing a new or substantially improved product that has enhanced performance characteristics
- changing a manufacturing process to make it more efficient, reducing waste materials, improving speed of production or cost-efficiencies
- using new materials for an existing product to make it lighter, stronger, more flexible or durable
- building a prototype (not to be sold) for testing performance and expected service life
- additional automation in the manufacturing process to remove human intervention and reduce errors
- taking products from different industries and adapting them for a new specific purpose
- overcoming system uncertainties to combine new technologies into one new production line.
At UHY, we have significant experience of making successful R&D tax credit claims for companies in the healthcare and pharmaceuticals sectors. This includes making claims on new drug discovery projects, the design, development and testing of new medical devices and the development of new software to increase the level of successful patient treatments.
HMRC recognise there is significant R&D undertaken in the development of potential new drugs, and have specific tax guidance on the four basic stages in pharmaceutical R&D, which are summarised below:
- Drug discovery - which involves drug synthesis, biological testing and toxicology studies
- Pre-clinical development - which includes further laboratory tests in vitro and on live animal subjects
- Clinical development (phase I to phase III) – where potential drugs are tested in clinical trials on human subjects
- Post launch - phase IV trials occur once a product has been licensed to the public to check for any unknown side-effects
It is generally accepted by HMRC that the research activities of discovery, pre-clinical development and phase I to III trials will usually be concerned with the resolution of scientific and technological uncertainty and will be qualifying activities for R&D tax credits, but that the post-launch phase IV trials will not.
Healthcare and pharmaceuticals are one of the growing sectors to claim R&D tax credits in the UK and there are numerous cases of R&D activity in this sector. Below, we have listed a range of examples for which either we have made successful claims, or which are HMRC approved examples of approved activities:
- creating a brand-new drug where potentially useful compounds, referred to as new chemical entities (NCEs) are identified and developed with clinical research organisations (CROs) through to the relevant licensing and launch to market
- a project to create a new artificial bladder system for patients with urinary difficulties, made substantially more comfortable, safe and leak proof than the other leading products on the market
- using tissue harvested from pigs’ hearts to develop a new aortic heart valve that reproduces the functionality of a human heart
- the digitisation of patients’ medical records, historically held as paper records by both the public sector (NHS) and private sector to enable predictive screening to avoid severe disease
- developing health management software to diagnose health risks so that interventions can be made at an early stage to prevent long term health consequences and avoid straining NHS services.
At UHY, we have significant experience of making successful R&D tax credit claims for companies in the software development sector. This includes making claims on websites developed for academy schools, online casinos and betting platforms and travel companies, as well as for the software development companies themselves. This includes claims in retail, transport and logistics, telecommunications, professional services and audio visual (AV) devices.
There are two key criteria to be met for software development projects to qualify as R&D and either one can be met:
- where software is created or adapted solely as a tool for direct use in a larger qualifying R&D project in another field.
OR (most commonly)
- where the development of the software is the goal of the R&D project.
The information and communication technology sector has the highest number of R&D tax credit claims in the UK and there are numerous cases of R&D activity impacting this industry, listed below, for which either we have made successful claims, or which are HMRC examples of approved activities:
- implementing new novel algorithms to find solutions to problems that are not readily deducible to a competent software professional
- new encryption and security techniques that are being regularly updated and advanced
- appreciable improvements to underlying software to improve User Interface (UI) and User Experience (UX)
- the development of computer AV devices and Virtual Reality (VR) systems for different settings
- Artificial Intelligence (AI) is also a growing area for software claims with it being used in machine learning, image scanning and data processing.
With all of the above examples, the important HMRC criteria rely not on what is being developed and produced but how. HMRC have in-house software specialists to help their R&D team to review software-based R&D claims, meaning the level of technical detail required in the report can be slightly higher than for other sectors.
These are just examples of qualifying R&D activities and a company would only need to meet one of these criteria which results in ‘an advance in science or technology’ in their sector to have a qualifying R&D project and make a tax relief claim to HMRC.
If you would like us to assess your business activities for potential R&D claims, or would like to discuss or get a second opinion on any current or previous claims, please contact one of our R&D experts, or your usual UHY adviser.