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Did you know your printing and packaging clients may be eligible to claim R&D tax credits?

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Author: Tom Mason

There are over 10,000 companies in the printing and packaging sector across the UK.

Many of these businesses are missing out on valuable R&D tax relief simply because they don’t realise their work qualifies as research and development.

As R&D tax consultants, we understand how crucial accountants are in helping their clients make the most of R&D tax credits.

It’s your responsibility to step in, identify these opportunities, and ensure your clients receive the financial benefits their innovation deserves.

What qualifies as R&D for tax relief?

Before diving into potential R&D projects, it’s essential to understand the three core eligibility criteria for R&D tax relief:

  1. The work must aim to make a genuine advance in a particular field, not just improve processes or products within the business itself.
  2. The project must tackle scientific or technological uncertainty. This means that a competent professional in the field couldn’t already know how to achieve the desired outcome.
  3. You must document and demonstrate the steps taken to overcome the uncertainty and achieve the advance.

These criteria ensure that only genuine innovation qualifies, preventing people from mistakenly assuming that routine improvements or everyday business challenges are eligible.

Helping clients spot qualifying R&D projects in printing and packaging

Innovation in the printing and packaging industry doesn’t always have to involve high-tech gadgets.

It’s often about overcoming technical challenges in ways that break new ground – whether by redefining processes or creating solutions that genuinely advance the industry.

Here are some examples of what that might look like in practice:

  • Improving sustainability and efficiency – With growing pressure to be more eco-friendly, many businesses in the printing and packaging industry are looking for new ways to cut down on waste and improve sustainability. For instance, your client may have come up with a way to use recycled materials in packaging without compromising on quality.
  • Better print quality through new techniques – Your client might be experimenting with new printing techniques to improve colour accuracy or using technologies like nanotechnology to enhance durability or finish. These tests, even if they don’t always work out as expected, could still count as R&D if they involve overcoming technical challenges to get a better result.
  • Custom solutions for unique packaging needs – Tailoring packaging solutions to meet a customer’s specific demands – whether it’s for an unusual product, a new shape, or a need for high durability – can often involve technical experimentation. These bespoke solutions often include trialling new materials, processes, and designs, all of which can count as R&D.

Even though these projects might not seem like major technological breakthroughs, they’re all about solving problems and pushing the boundaries of what’s possible in packaging.

For more information about qualifying activities in the printing and packaging sector, click here.

What costs can be included for these R&D tax claims?

Once potential R&D projects have been identified, it’s essential to outline the costs that can be claimed. These may include:

  • Staff expenses, such as salaries, National Insurance contributions, and pensions for employees directly involved in R&D. Be sure to specify the percentage of their time dedicated to these projects.
  • Subcontractor costs, particularly when specialised expertise is required, are eligible for inclusion. You can only claim 65 per cent of the contractor’s fee. For instance, if £40,000 is paid to a contractor, £26,000 would be eligible for the R&D tax claim.
  • Software and consumables, including costs for power, water, materials, and even failed prototypes used in the development process.

These costs can be reimbursed, provided the claim is successful.

Partnering with randd uk

By identifying these opportunities for your clients, you’re not just helping them secure valuable cash from tax relief, that they can then reinvest in their business.

At randd uk, we have a proven track record of claiming back thousands of pounds in tax for clients in the printing and packaging industry – and we can help you do the same for yours.

Contact us today to discover how we can help you and your clients maximise R&D tax claims.