RESEARCH & DEVELOPMENT AUTOMOTIVE

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 powertrains, 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. 

AND HERE’S WHAT OUR CLIENTS SAY ABOUT US 

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. 

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: 

Simply put, “Change” and “Challenge”. 

• Projects that include some element of “change” qualify. We’ve looked to make something different, better in some way (quicker, lighter, stronger, smaller); and 
• 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: 

• 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
• Automation of manufacturing processes
• Value engineering to reduce cost whilst maintaining performance
• Process development to:
  • Increase reliability
  • Increase efficiencies
  • Reduced wastage
  • Increased throughput
• Integration of new technologies from another industry
• Investigative work identifying causes of manufacturing defects
• Development of manufacturing techniques to construct complex components
• Feasibility studies of concept vehicles and technologies
• Manufacturing trials to resolve technical challenges with scaling up new products to full-scale production
• Trials to improve process efficiencies, throughput or reduce waste/costs

ESTIMATE HOW MUCH YOU COULD CLAIM ON R&D TAX INCENTIVES 

Have you ever wondered whether you could make a claim for R&D tax incentives? Or, if you’ve already made a claim, maybe you want to find out how it stacks up against your industry peers and expectations? Our R&D Tax Credit Calculator answers those questions and gives you an instant estimate of the benefit available to you. 

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.