Research and development (R&D) is hugely important in the textiles industry, particularly for companies wanting to compete in a challenging market with growing pressure to improve energy efficiency and reduce waste.
Textiles R&D is necessary for addressing real-world challenges such as safety, warmth, and adaptability to different climates.
Important innovations are being made to produce essential medical materials and sustainable fabrics for home furnishings.
Unfortunately, the textiles industry is frequently discounted by operators as ineligible for R&D tax relief, which is designed to reward and incentivise innovation in a wide range of sectors.
The breakthroughs and experiments in the textile industry can indeed be eligible for R&D tax credits, which offer a much-needed cash boost for textile businesses.
Eligible R&D work in the textiles industry
Some innovative projects in the textiles industry clearly meet all the qualifying criteria for R&D tax relief:
- Address a challenge or uncertainty within the sector that cannot be easily overcome by another expert.
- Seek an overall advance in the industry, not just for the business.
- Relate to the science of textile and material development.
The final criterion is often the sticking point for R&D tax relief claims for textile businesses. However, as long as a textile R&D project addresses a scientific issue, such as the chemical composition or tension of a fabric, a case can be made for a claim.
Some examples of eligible R&D activities within the textiles industry include:
- Creating, developing and improving new products, processes and handling techniques (such as instruments or tooling).
- Adapting products and processes to adhere to changes in legislation or industry requirements.
- Improving existing processes to enhance energy efficiency and reduce carbon emissions.
- Testing new products and processes to improve performance, cost-efficiency and methodology.
- Prototyping and 3D modelling activities.
- Designing, developing, and testing new composite materials.
- Modifying an existing fabric for a new purpose.
- Trialling innovative approaches to textile production.
Business leaders spend a lot of time looking for investments, grants and loans, but often overlook R&D tax credits.
Don’t make the mistake of discounting the scheme before you’ve even checked whether a project is eligible. Your client could be eligible for a substantial cash boost, and we can help you make that happen.
For example, we helped a Carlisle-based tweed weaver company claim £274,000 in R&D tax credits over six years.
How to help textile businesses claim R&D tax credits
It’s important to encourage your clients to think laterally when discussing R&D tax claims.
The goal of R&D tax relief is to encourage R&D wherever it happens, meaning that all sectors making a meaningful scientific or technological contribution to an uncertainty within that field may well be eligible to submit a claim.
A simple shift in mindset may be all it takes for your client to get on board with the idea of claiming R&D tax relief.
R&D tax relief is a complex area, and many accountants lack the specialist expertise needed to prepare and defend comprehensive R&D tax claims.
randd uk offers the knowledge and experience you need to provide high-quality R&D services to your clients.
Our expert R&D consultants put integrity first and foremost. We evaluate all projects thoroughly to determine eligibility for R&D tax relief, and we take care to prepare accurate claims that will stand up to HMRC scrutiny.
We’re the go-to provider for accountants who need support with their R&D services. Why not get in touch to find out why?
