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When looking to improve the functionality of textiles, there is a tendency to focus too much on the materials used and the way they create a novel product.
While this is often the point of origin for R&D work, it is not uncommon for smaller projects to split off from the main one when existing processes fall short at realising the desired aim.
Appreciably improving the machinery or processes on the production line may count as R&D in its own right, but it is vital to know what is eligible and what would be considered routine work.
How might improvements to textile production count as R&D?
As a general rule, where a complex array of systems and processes exists, there is the capacity for R&D to be done.
The way in which textiles are produced now is so radically different to what was produced centuries ago that it is clear that innovation must have taken place.
Computer Numerical Control (CNC) machines are a staple of textile production and are routinely calibrated to ensure that they are fit for continued use.
If all a business is doing is occasionally optimising the settings of the CNC machines, then this does not count as R&D, given that such upkeep is an expected part of using machinery.
However, much of the equipment for textile production was designed and developed around traditional ways of producing products.
This means that it may no longer be sufficient if a business has adopted a different set of materials in an effort to be more environmentally sustainable.
Natural and synthetic materials have different levels of quality and durability, so while a machine may be able to produce synthetic products with ease, it might destroy natural materials.
The inconsistency of natural materials could also introduce complications if fraying fibres pose a risk of getting caught in machinery and causing damage.
While some issues might have a straightforward solution, there is a distinct possibility that something more innovative may be required.
Creating new components for existing machinery that allow them to perform the same functionality with a wider range of materials might pose an uncertainty that would require experimentation to resolve.
It may even be that these bespoke modifications work to improve the environmental sustainability of machinery that was not previously considered possible.
How can improvements to textile production be handled in an R&D tax relief claim?
Depending on how complex the work undertaken will affect how you represent the claim.
If the work was innovative but was primarily part of a larger project, it may be worth featuring it as a contributing factor in the achievement of that advance.
Where more time and resources have been committed to improving the process, it could be worth separating the advance out into its own project.
HMRC do accept multiple projects on a single R&D tax relief claim, provided they are appropriately documented and costed.
This is why the decision should centre on the qualifying expenses incurred in doing the work to improve the production.
Challenging work with minimal costs attached does not generally benefit from being placed in its own project in the same way that overloading one project with extra costs can be detrimental.
To know the best way to handle this kind of innovation, seeking support from R&D tax consultants is beneficial.
We can advise you on how to manage your projects, so they work best for you and can be understood by HMRC.
There may be more innovation happening in the textile sector than many realise and we are keen to make sure it is all given the recognition it deserves.
Speak to our team today for R&D tax relief support if you have achieved an advance in the textile sector.
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