Can you adjust the flavour of food without your R&D tax relief claim going sour?

If cooking is an art and baking is a science, then does that mean HMRC are only interested in baked goods?

In reality, the food and beverage sector can be home to core innovations designed to help increase the health of those looking for their next meal.

Few things matter more than how something tastes, but HMRC have a nuanced view of innovation in this area that must be understood.

Can changes to the flavour of food be considered R&D?

Whether adjustments to flavour count as R&D or a routine piece of work largely depends on what is being changed and why.

By default, flavour and texture are both considered aesthetic improvements and should be excluded from an R&D tax relief claim.

However, there can be some advances in science and technology achieved in the pursuit of aesthetic changes and these can be considered R&D.

So the question that must be asked of any project that features changing the flavour of food or beverages is why the flavour needs to be modified.

If the flavour modification is geared towards making the product sell better when it goes to market, then this will be viewed as a commercial objective and the work must be excluded.

If the flavour modification is necessary due to the adverse effects of other innovative actions, then it could be a valid part of a larger R&D tax relief claim.

It might be that new sterilisation or pasteurisation techniques entirely destroy the original flavour of the product, meaning that it is no longer fit for use.

While it might then have better shelf life, if it is inedible then it is not an appreciable improvement.

It may then be necessary to either adjust the process or modify the composition of the product itself in order to produce something fit for human consumption.

How should work to change the flavour of foods be handled in an R&D tax relief claim?

It is best to take great care when trying to include work to modify flavours in your R&D tax relief claim, as there is a fine line of acceptability that is being walked.

Any work done to change the flavour of food must be viewed through the critical lens that HMRC is likely to apply to it.

The most effective way to achieve this would be by pairing it with a more detailed explanation of something more overtly innovative.

It should be made clear how altering the flavour of food was a necessary part of achieving the other advance, without dwelling so long on the process that the technical narrative loses focus.

As R&D tax consultants, we are used to seeing these nuanced issues faced by the food and beverage sector.

We can review the work you have done to determine what can be included in your R&D tax relief claim and what is ineligible.

Given that the food and beverage sector is considered niche by HMRC, R&D tax relief claims from the sector are more likely to be subject to an enquiry.

If this occurs, you will need to be confident that everything included in the claim is valid.

We conduct regular health checks before submitting an R&D tax relief claim and will defend eligible claims from enquiry.

This allows you to relax, knowing that your innovative work can be recognised.

For a sweeter way to handle R&D tax relief claims, get in touch with our team today.

Adam Bointon