If, like us, you’ve found yourself drawn in by the 2024 Summer Olympics and the ups, downs and surprises of international sport, then you’ve likely come across a number of R&D triumphs.
R&D, certainly for tax purposes, is often seen as the reserve of life sciences, chemical development and heavy industrial manufacturing – particularly by businesses outside of these sectors.
However, commercial R&D is all around us – and that was nowhere more evident than on the Olympic podium.
The sporting case for R&D
The world of competitive sport is driven by talented athletes, but it also relies heavily on the right equipment and nutrition.
Developing new nutrition products or sporting equipment is often eligible for R&D tax relief as advancements in science and technology, with some common examples including:
- New formulae for sports nutrition and rehydration
- New materials for sporting equipment
- New fabric and materials for activewear
For a major sporting event such as the Olympics, we may also see related developments such as solutions to the large amount of unsustainable waste produced by large gatherings of people.
Provided that it meets the criteria specified by HMRC for R&D tax relief, all of these developments and more may qualify businesses to make a claim.
The qualifiers
On the face of it, sports developments are no different to any other commercial R&D activity, in that it must meet certain criteria in order to qualify for tax relief, including:
- Seeking to overcome a scientific or technological uncertainty
- Qualifying expenditure, such as staffing costs or software licencing
- Not being easily worked out by another professional in the field
However, the issue with claiming for development in sporting equipment and related fields is that many businesses assume that their projects will not be eligible.
Conversely, you may find that clients are conducting work which applies an existing product in a new way and want to claim relief, in which case their project may be ineligible.
It is therefore important that you approach any client conducting work in this area with the possibility of claiming R&D tax relief on their output. From here, you can determine eligibility and look at preparing a claim.
If your client is conducting R&D in the sports sector, please contact our team today for support with preparing and submitting a successful claim.
