Research and development (R&D) is becoming increasingly important in the printing and packaging sectors. Three-dimensional printing has become an integral part of manufacturing and production processes — helping to create accurate prototypes and designs at high speed and low cost.
Packaging companies have an increasing obligation to minimise their impact on the environment as more people seek greener solutions that won’t end up in an ocean or landfill.
Printing and packaging companies unknowingly undertaking R&D is one of the chief reasons why so many are still drastically underclaiming the R&D tax credits they’re entitled to. Some aren’t even claiming at all. You could also be missing out on claiming back up to 33% of R&D costs to put straight back into your business to spend however you choose.
R&D tax credits eligibility is often mistakenly assumed to apply only to the creation of a new product. Yet making modifications to existing products counts too. We often find qualifying R&D where clients attempt to minimise waste and solvent use. Although all industries generate waste, packaging companies are likely to produce more than many other sectors.
Printing firms have historically used solvents in various materials — from thinners and inks to cleaning agents and dampeners. By taking the time to implement a formal environmental management system, you can reduce overheads, utilise resources more efficiently, and find it easier to comply with environmental legislation.
This can lead to an enhanced reputation among clients, competitors and stakeholders who emphasise eco-issues, and the government is willing to ensure that you recoup the costs.
The ability to have the headspace and creative freedom to investigate solutions to these challenges would be considerably more difficult without the government’s financial aid supporting innovative printing and packaging companies. If you’re undertaking R&D projects — both successful and failed — it’s time for you to claim the R&D tax credits you truly deserve.
Print and Packaging projects that may qualify for R&D tax relief include:
- Trialing quality of print / chemical reactions which may occur on new materials
- Improve the colouration or adhesion of ink on materials
- Trialing or testing of a new printing method or technique
- Developing processes to use novel inks or new inks
- Developing solutions to reduce hazardous substances
- Reducing ink or material waste, or finding new ways of recycling
- Product colour, weight, strength, or integrity problem solving
- Overcoming design issues involving temperature, cooling, pressure, or velocity
Interested in claiming R&D tax credits?
What activities can be included in a R&D project?
- Defining technical objectives
- Identifying uncertainties
- Feasibility studies, reviewing new and competing technologies
- Analysing, designing and developing the technology
- Producing technical specification or other documents to explain and support the R&D project and advancement
- Testing the product, process, service or software
- Planning and managing projects
- Administration, finance and personnel services specifically required to support R&D activities
- Training to support R&D
What expenditure can be claimed for in a R&D project?
- Staff Costs – Employee costs (salary, national insurance and employer pension) are apportioned for their time spent on the R&D project plus any reimbursed associated business expenses
- Software – Purchased for R&D purposes and costs apportioned for any subsequent use
- Subcontracted R&D – You can claim 65% of what you paid your R&D subcontractor
- Utilities & Consumables – Water, fuel, power and material used in the project
- Prototypes – Produced for R&D purposes