Susan Parker
R&D Senior Manager
RESEARCH & DEVELOPMENT AUTOMOTIVE
The automotive sector is always innovating be it in new materials, durability and beyond. Don't miss out on claiming R&D relief.
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If your business is in the automotive sector, there’s a strong chance that you could benefit from a Research and Development (R&D) incentives claim.
R&D may sound like complex tax relief, only available for boffins and scientists who are pursuing ground-breaking developments. It’s not. It’s available to so many other businesses.
Put a different way, the automotive sector are always innovating to push the boundaries be it in new materials, durability, lightweighting, electric power trains, space constraints, value engineering, or even the same products but a different manufacturing process. Some new, some existing but looking to improve and progress. All equally qualifying. If that’s you then there’s a good chance you could benefit from making a claim.
Don’t miss out on an opportunity to claim the up to 33.5% cashback which is available on qualifying R&D spend.
WE REALLY GET UNDER THE BONNET OF R&D IN AUTOMOTIVE
In four years, we’ve put more than £61 million back with businesses through making R&D incentives claims. Our experienced and dedicated R&D incentives specialists know what to look for and we know where to find it.
Meet Chris Knott our lead R&D Partner who really gets it when it comes to the opportunities for businesses in the automotive sector. With his combination of over 21 years’ R&D Incentives experience, Chartered Tax Advisor status and mechanical engineering background, Chris has a unique combination of qualifications and experience that has been used to good effect in the automotive sector.
By being able to walk the shop floor and “look under the bonnet”, he has made claims for 5 of the F1 teams, 3 tier 1 car manufacturers (increasing 1 of their claims 4-fold from what had been previously advised!). Additionally, in terms of the multitude of supply chain that sits underneath it all, over the years he has also made claims on everything from brakes and pedals to axles and tyres.
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R&D TAX CREDITS FOR AUTOMOTIVE EXPLAINED
If you can identify your technology or science project undertaken over the last 2 to 3 years, which meet a special definition of R&D then you can potentially make a claim. You don’t need to be setting the world alight, but projects must meet two criteria. 1. Seeking an advance in science or technology, and 2. Whilst resolving scientific or technological uncertainty.
Simply put, “Change” and “Challenge”
Change
Projects that include some element of “change” qualify. We’ve looked to make something different, better in some way (quicker, lighter, stronger, smaller).
Challenge
There wasn’t an obvious or standard solution, so we couldn’t effect the change immediately without some thought, time and testing. Some challenges were faced that lead to the engineers scratching their heads and a few sleepless nights (we love a good old-fashioned engineer’s “tweak”).
The process involves identifying costs you’ve incurred during the R&D projects. You can claim staff costs (directly and indirectly involved), payments to contractors or agencies supplying personnel (potentially, dependent on size of the company), consumables, software licences and utility costs.
WHAT TYPE OF AUTOMOTIVE PROJECTS CAN QUALIFY FOR R&D TAX CREDITS?
A broad range of projects can meet the Government’s R&D definition, for example:
1. Design and development to improve vehicle performance:
- Aerodynamics
- New materials
- Lightweighting
- Fuel efficiency
- Battery technology/life
- Space constraints
- Improvements in structural performance or crash worthiness
2. Automation of manufacturing processes
3. Value engineering to reduce cost whilst maintaining performance
4. Process development to:
- Increase reliability
- Increase efficiencies
- Reduced wastage
- Increased throughput
5. Integration of new technologies from another industry
6. Investigative work identifying causes of manufacturing defects
7. Development of manufacturing techniques to construct complex components
8. Feasibility studies of concept vehicles and technologies
9. Manufacturing trials to resolve technical challenges with scaling up new products to full-scale production
10. Trials to improve process efficiencies, throughput or reduce waste/costs
WHY IS RESEARCH & DEVELOPMENT IMPORTANT FOR THE AUTOMOTIVE SECTOR?
We speak to hundreds of businesses that think they don’t qualify for the relief, or potentially even worse know about the scheme but don’t realise the extent to which what they’re doing satisfies the breadth of the definition for tax purposes and hence are leaving valuable cash on the table, which makes the eureka moment sweeter.
If you can answer “yes” to both of the criteria mentioned above (are you changing anything? did you face some challenges in effecting those changes?), it’s time for us to have a chat, because R&D tax incentives are a fantastic way to keep your business and your cash flow on the front foot.
GET IN TOUCH WITH CHRIS KNOTT
Chris Knott
Partner & Head Of CP Innovation
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AND HERE’S WHAT OUR CLIENTS SAY
“Chris and the team helped us realise what we could do, and we went from there. We got a proper understanding of what we could actually claim for. The claim process was incredibly relevant to us. We’re a very innovative company so we quickly realised it could be very financially rewarding. Chris and the team quickly developed an understanding of what we did. He really understood what our business did and where the potential claim would be. It certainly helped to have someone with that level of knowledge. Knowledge of the process but the technical aspects too”.
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SHEILA, JULY 24
“Andy and Dan established a comprehensive audit plan with realistic timelines. Their communication was professional and supportive throughout, resulting in a highly collaborative process. The AFR will support us in making improvements to our practices..”
“Pleased you found working with us collaborative and professional.”
PASI, JULY 24
“Audit and regular tax doing all good and no issues. R&D claim we have currently quite an issue. Even though I appreciate hard work and effort CP’s team had put on answering those enquiries. Naturally I do not hold CP responsible for HMRC’s unlogical behaviour.”
“Thank you for your feedback. The R&D landscape has become difficult over the past couple of years, and we continue to provide feedback to HMRC, both directly and via governing bodies, in the hope that their processes and approach to claims will be improved over time.”
RISHI, JULY 24
“Since working with Cooper Parry communication has been excellent. All deadlines have been met as agreed. Support with additional support given whenever required.”
“Delighted to hear it Rishi, please we're giving you the support you need :-)”
TONY, JULY 24
“Similar to last year but felt the whole process this year was a lot more painful this year with amended HMRC guidelines.”
“Sorry we can't change HMRC but we'll always be on board to help you where we can.”
ROB, JULY 24
“Great work all round.”
“Appreciate your comments Rob.”
GUNEET, JULY 24
“It has been great to work with such a wonderful team, highly professional and very knowledgeable. “
“Thanks so much for the feedback Guneet.”
ADRIAN, JULY 24
“Having moved the audit to CP from BDO we have been pleased with the quality of staff provided for the audit, their positive attitude and their work ethic. CP have done exactly what they said they would do in their proposal so far. The test will be around whether this was a special effort for the first year or reflective of the normal level of service that they provide going forward. i.e. Let’s keep it up and work together to increase efficiency and effectiveness. “
“Wonderful to hear we've made a fabulous first impression. We'll definitely be keeping up the hard work to take our relationship to the next level. ”
GREGOR, JULY 24
“Service is always excellent, and responsive.”
“Glad it's working for you!”
NITIL, JULY 24
“Doing a very good job.”
“We're hoping to turn 'good' into 'great' for you Nitil :-)”
ELVIRA, JULY 24
“I have only had very limited time working together but it has all gone smoothly.”
“Thanks Elvira, looking forward to growing our relationship in the future.”