A polymer recycling manufacturer's R&D claim

Four projects, all driven by outside pressures. The company had to adapt its process to new food-contact regulations, find the causes of optical anomalies in its recycled sheeting, test whether an existing dryer could double as a cleaning device, and develop new processes to remove contaminants caused by material shortages, without major capital spend.

Regulations effective in July 2023 prohibited the standard layered structure the company used, so it had to develop a commercially viable process and materials mix that still met the rules. Whether and how that could be done was not readily deducible from existing knowledge, which is what made the work uncertain rather than routine.

Yes, where it is a systematic way of resolving genuine technological uncertainty. In this case the company ran challenge tests with a laboratory to establish the temperatures and minimum times needed, and used microscopic analysis and iterative trials. The key is records showing what was tried, what failed and what was learned.

Staff time came from a fair and reasonable assessment by the technical leads, including qualifying indirect activities, taking a conservative approach where needed. Only materials, software and packaging consumed in resolving the uncertainties were claimed. Utilities were apportioned as a percentage of the employee costs claimed. Each cost head was tied back to the projects it supported.

More than £600,000 of qualifying costs for the period: around £175,000 of staff costs, around £400,000 of consumables and around £40,000 of utilities. The company had about 25 staff and a turnover of almost £10m, so it qualified as an SME for the period ended 31 March 2024. The totals were arranged project by project.

The period ended on 31 March 2024, and began before 1 April 2024, so the claim was made under the SME scheme rules that applied to that period. Periods beginning on or after 1 April 2024 fall under the merged scheme or ERIS instead. The same evidence principles apply under both.

Under the SME scheme rules that applied to this period, subsidised expenditure was restricted. The company confirmed it had received no subsidies or grants for these projects, which kept the enhanced relief open. Checking subsidy status early is part of any claim, since it can change what is claimable. For periods beginning on or after 1 April 2024, this restriction no longer applies.

It showed that the company itself decided the work needed doing, owned what resulted and carried the financial risk, which supports the claim being its own. The company worked with the machine manufacturer on the approval, but it kept the intellectual property specific to its machine and process. These points go to who the claimant is, and they are part of what we confirm.

Because every cost in a claim has to be defended if HMRC asks. Erring on the cautious side avoids any risk of overclaiming and makes the submission more credible. The numbers were also arranged per project, so the technical report and the financial summary reinforced one another. It is the habit we bring to every claim.

That regulation and supply chain problems can generate genuine R&D, and that detail wins claims. Repeated conversations with the competent professionals, a technical report that explained existing practice and the advance sought, and cost workings tied to evidence are what make a claim hold up if it is checked. Our approach is built around that.