FINANCE
Using R&D tax relief to support logistics innovation
Brexit, the pandemic, changing customer demands and the rapid expansion of e-commerce mean the logistics industry is facing many challenges. The need to overcome these hurdles is driving many companies to innovative solutions – but not all will be aware of how they can recoup costs through R&D tax relief, as Caroline Hawkins (pictured), senior manager of Shorts Accountants’ Radius team, explains.
WHAT IS R&D TAX RELIEF? Successive governments have used R&D tax relief to incentivise companies to invest in innovation by offering reduced corporation tax, and in some cases cash credits, to innovative companies. The relief can be worth up to almost 25% of qualifying costs for tax-paying companies and is a vital source of support for many claimants.
WHO CAN CLAIM R&D TAX RELIEF? R&D tax relief is available for companies seeking to advance technology by creating or improving
products and processes. Many eligible companies do not claim the relief they are entitled to because they overestimate the level of innovation required. Commercially- driven innovative solutions to industry challenges often lead to projects which qualify for R&D relief.
INNOVATION IN THE LOGISTICS INDUSTRY Many solutions are technology- related, with logistics companies turning to software to help with supply chain management, stock management, warehousing, enterprise resource planning (ERP) and customer relationship
management (CRM) systems. New or improved software
development can be eligible for R&D relief where the software being created goes beyond the capabilities of existing software. An example of a claim recently
completed by the Radius team was for a logistics company that developed a new system for warehousing and fulfilment, which integrated the process from order receipt through to delivery. This required the development of bespoke software to integrate with complex legacy systems. Other solutions can include
manufacturing improved transport
solutions. For example, the Radius team has recently completed claims for a trailer manufacturer developing a novel trailer with simplified loading and unloading capabilities.
HOW CAN YOU GET STARTED? The above are just two examples of the way logistics companies may be undertaking projects for commercial reasons that could benefit from R&D tax credits. If your company is involved in any new product or process development, a reputable R&D tax relief expert can help you determine whether R&D tax relief is available.
business network June 2021
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