Companies in the marine and maritime sector frequently undertake innovative projects that seek scientific or technological advancements.
However, many are not aware of their eligibility for research and development (R&D) tax relief.
Claiming R&D tax credits can provide much-needed funds for marine and maritime businesses looking to grow and continue innovation.
Our specialist R&D tax consultants will provide you with everything you need to maximise your client’s claim.
Why claim R&D tax relief?
Claiming R&D tax relief brings a range of benefits to companies in the marine and maritime sectors.
By offsetting expenses associated with R&D work, R&D tax credits greatly reduce the risks involved in expanding and developing a business, allowing companies to strive for market growth and a competitive advantage due to a reduction in the financial burden of a company’s owners, shareholders and/or investors.
Utilising R&D tax credits also enables companies to either procure a cash refund or a reduction in their tax liabilities, enabling them to retain a larger portion of capital available in order to reinvest in R&D incentives or other areas of the business.
Additionally, the active pursuit of R&D activities and leveraging tax credits helps marine and maritime companies position themselves favourably in the marketplace.
What activities qualify for R&D marine tax relief?
Your R&D project does not need to be successful in order to qualify for tax relief.
As long as the R&D work has been undertaken to try and make an advancement within the field of science or technology, and that the boundaries of knowledge have been extended in those attempts, the activity is likely to qualify for an R&D tax claim.
Examples of qualifying projects in the marine and maritime industries include:
- Developing new shipbuilding processes and methods.
- Inventing a new propulsion system to improve boat speed.
- Creating and testing an improved method for processing bilge water aboard cruise liners.
- Designing new construction techniques, corrosion protection and damage resilience for marine vessels.
- Improving the energy efficiency of passenger vessels.
randd uk’s expert R&D tax consultants can help you understand whether a project qualifies under the scheme.
What costs qualify for R&D tax credits in the marine sector?
There are a range of qualifying costs for R&D tax relief, such as the cost of salaries, National Insurance and pension contributions for staff “directly and actively” engaged in R&D activities.
However, direct staffing costs do not always entirely qualify for R&D relief, which is where timesheets and other records will come in handy.
For external and subcontracted R&D staff, you can claim up to 100 per cent of the cost for workers provided by an external agency if it is connected to your company, or 65 per cent if they are not.
Indirect costs may also be eligible, such as specialist cleaning staff and the costs associated with the recruitment of a specific person or skillset.
When a staff member works on qualifying R&D only part of the time, timesheets and records are essential to demonstrate that your client is only claiming for eligible work.
Other costs that may be are eligible for R&D tax relief include:
- Data licences and software subscriptions.
- Cloud computing services.
- Directly consumed items, such as fuel, electricity, water, and chemicals.
- Prototypes and testing.
- Collaborative work.
- Using AI to advance products, processes and services.
- Costs spent on lowering and monitoring emissions from marine vessels.
- Technical or robotic surveyors that can explore areas humans cannot.
Some costs, such as capital expenditure, don’t always qualify for R&D tax relief, so you should document how all costs within the claim are eligible.
Our R&D tax specialists can help you identify exactly what relief you may be able to claim for your client.
How to help my client with R&D tax relief for marine and maritime projects
For marine and maritime companies in the UK, R&D tax relief provides an excellent opportunity to access financial support for innovative projects.
Accountants looking to claim R&D tax relief for their marine and maritime clients need to submit a detailed report outlining their R&D activities, the technological challenges faced, and how the project aimed to overcome them.
While the process can seem complex, working with an expert in R&D tax claims can simplify the process and help ensure that all eligible activities are captured.
At randd, we are available to help manage the tax relief claim for any qualifying seafarer.
We provide expert R&D help for accountants to put together a watertight claims process that will minimise the chances of HMRC enquiries.
Together, we’ll help you navigate the murky waters of R&D tax relief and claim up to nine times more for your clients.
