Businesses in the chemicals industry frequently undertake research and development (R&D) work, and more of it may be eligible for R&D tax relief than you realise.
However, for accountants with clients in the chemicals sector, it can be difficult to understand the complexities of the R&D tax relief system.
Our expert R&D tax consultants explain what you need to know about claiming R&D tax relief for chemical businesses.
Why R&D tax relief is important for chemical businesses
Customers and regulators are constantly demanding new products that meet high standards of quality, safety, and sustainability – all while remaining affordable.
This means that R&D is an essential part of day-to-day business in the chemicals industry. However, these projects can be particularly expensive to conduct, which is why R&D tax relief is a valuable incentive for your chemical business clients.
R&D tax credits can help to offset the costs of failed research projects and provide extra capital that can be reinvested back into the business.
Which projects may be eligible for R&D tax relief?
R&D projects must seek an advance in science or technology where there is uncertainty involved to qualify for R&D tax credits.
Crucially, a project does not have to be successful to be eligible for R&D tax relief.
Examples of qualifying R&D activities within the chemicals industry include:
- Adapting to changes in legislation or industry requirements, including energy efficiency and reducing carbon emissions
- Creating and testing prototypes of new technologies.
- Developing and testing new composite materials.
- Designing systems to remove more toxic chemicals from materials.
- Reducing carbon dioxide emissions through technological changes.
- Overcoming technical challenges with using renewable energy.
- Streamlining processes to become more energy efficient and reduce wastage.
- Developing pilot plants for testing.
- Improving the safety of plant processes.
- Enhancing the safety, stability and packaging of chemical products.
R&D expenditure you can claim R&D tax relief on include direct staffing costs, consumable materials, and specialist software.
Our specialist R&D tax consultants can help you clarify whether a project is eligible for R&D tax credits and establish qualifying costs.
Claiming chemical R&D tax credits with randd uk
If you believe your client qualifies for an R&D chemicals tax credit claim, it is important to gather as much evidence as possible to back up your claim. Keeping clear financial records and documenting the R&D process can make preparing a tax credit claim much easier.
Helping your clients claim R&D tax relief can be daunting – but you don’t have to do it alone.
At randd uk, our expert tax consultants can manage your client’s R&D tax relief claim on your behalf.
We’ll identify costs you may not think are eligible and prepare thorough, detailed claims that have the best chance of standing up to scrutiny from HM Revenue & Customs (HMRC).
With a strong track record of helping companies claim thousands of pounds in tax relief, we’re the go-to R&D tax partner for accounting firms like yours.
We’ll oversee every step of the process from when you first contact us, minimising the impact on your day-to-day schedule so you can focus on what you do best, providing valuable accounting and tax advice to your clients.
