The food and beverage industry is the UK’s largest manufacturing sector, valued at over £100billion. The dynamic field is constantly evolving to meet consumer demands for sustainable, cost-effective and health-conscious products. To support these advancements, the government has established a specific R&D tax credits scheme for the food industry.
If you are a food or beverage business investing in new food products, packaging or processes, you could qualify for significant tax relief. Throughout this guide, we will explore:
- The benefits of R&D in the food industry
- Who qualifies for R&D tax credits in the food industry
- How much R&D tax relief your company could claim
- How Randd can support your R&D claim
| At Randd, we have successfully secured over £250million in R&D tax credits for our valued clients, including claims for food industry tax relief. Want to see how much your company could claim through R&D Tax Relief? Try our FREE tax credit calculator for an instant assessment of your eligibility! |
Research and Development in the Food Industry
What Is It & How Can It Help Your Business?
Research and development in the food industry encompasses a broad spectrum of activities, from recipe innovation to pioneering production methods. However, many food production companies are missing out on R&D tax relief due to misconceptions about eligibility, highlighted by the food and beverage sector accounting for only 1% of total claims in 2022.
As per government guidelines, qualifying expenditure for R&D tax relief in the food and drink industry includes projects that work towards:
- Developing healthier product alternatives, e.g. reducing sugar or fat.
- Enhancing food preservation to extend shelf life and reduce food waste.
- Creating plant-based or allergen-free food alternatives to enhance food safety.
- Developing sustainable packaging solutions.
- Increasing production efficiency to reduce costs.
Who Qualifies for R&D Tax Credits in the Food Industry?
The UK government offers tax relief to food production companies of all sizes that are investing in innovation. To qualify, your business must be:
- A UK-based company subject to Corporation Tax.
- Involved in scientific or technological advances surrounding food production, packaging or processes.
- Developing new or improved food products, processes or services that address industry challenges.
How Much R&D Tax Relief Can Be Claimed?
The amount of R&D tax credits that can be claimed depends on your company’s size and expenditure. We have created this simple table to break down the criteria for R&D in the food industry:
| Company Type | Criteria | R&D Tax Relief Available |
| SMEs (Small & Medium-Sized Enterprises) | Fewer than 500 employees & turnover under €100m. |
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| Large Companies | 500+ employees or turnover above €100m. |
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Qualifying Expenditure for R&D in the Food Industry
Food businesses claiming R&D tax credits must document expenses directly related to innovative projects that drive scientific progress, as recognised by HMRC. Here are some of the key qualifying costs that businesses in the food industry can include in their claim:
| Category | Eligible Costs |
| Staff Costs | Employee wages, pensions & National Insurance contributions. |
| Subcontractors/External Workers | Payments to third parties/contractors assisting with R&D projects. |
| Materials & Consumables | Ingredients, prototypes & laboratory materials. |
| Software & IT | Specialised software/cloud computing costs used in R&D activities. |
| Utilities | Power, water & fuel used directly in the R&D process. |
| Did You Know? Since the introduction of Research & Development Tax Relief in 2000, thousands of companies in a wide range of sectors have received over £42 billion in financial assistance from the scheme. If you have any queries about your company’s eligibility for R&D Tax Relief, don’t hesitate to contact our dedicated customer team, who will be happy to provide guidance. |
How to Submit An R&D Tax Relief Claim
It is vital to clearly understand company eligibility, qualifying expenditure and the claim process to ensure a maximised outcome for your claim and compliance with regulations. To submit a successful R&D food industry claim and avoid rejection from HMRC, your company must:
- Identify Qualifying Expenditure – Review your company’s project and ensure it meets HMRC’s R&D criteria.
- Calculate Eligible Costs – Include salaries, software, subcontractor costs and other materials related to R&D.
- Submit an Additional Information Form – For information and guidance surrounding the Additional Information Form, visit our previous guide on submitting an R&D AIF.
- Submit the Claim via CT600 – You must submit your claim to HMRC through the company’s Corporation Tax return (CT600) within the accounting period.
Simplify the Claim Process for R&D in the Food Industry with Randd
Submitting an R&D tax relief claim in the food industry without expert support can be time-consuming and complex. Many businesses struggle to identify qualifying R&D activities, calculate eligible costs, and ensure full compliance with HMRC regulations, leading to missed opportunities or incorrect claims.
At Randd, we streamline the R&D tax credit claim process, helping you maximise your claim while ensuring compliance. Our specialists guide you through every step, from identifying eligible R&D expenditure to preparing an accurate submission.
Make sure your company secures the maximum R&D tax relief available and avoids potential rejections from HMRC. Contact us at 01332 409 711 or email [email protected] for expert advice and a hassle-free claim process.
