Food for thought as accountants claw back ‘untapped’ tax savings

Food for thought as accountants claw back 'untapped' tax savings

David Morrison

Tax and business advisory specialists EQ Accountants LLP is urging food and drink businesses to explore potentially significant tax savings often associated with manufacturing or scientific companies.

The firm, which has offices in Dundee, Forfar, Cupar and Glenrothes, has claimed over £500,000 Research and Development (R&D) tax credits for 13 food and drink clients within the last year, ranging from food producers and food packaging companies to companies involved in designing and manufacturing equipment for the food and drink industry.

Although R&D tax credits can potentially apply to any companies developing or creating new products, innovations or processes, EQ experts believe many food and drink clients are oblivious to the savings they could be making.

David Morrison, head of EQ taxation, said: “Despite growing awareness of R&D, many businesses think that R&D tax credits only apply to pure research but there are so many sectors who are entitled to make a claim, from agriculture, software and engineering to design.

“Food and drink companies also now make up a substantial proportion of our claims yet many are missing out, because they don’t associate their line of work with R&D tax credits, or think their practices are not ‘scientific’ enough.

“Scotland boasts a growing array of fantastic food and drink businesses, many of which are making a huge impact both here and abroad, but they need to innovate to stay ahead.  As long as the company is seeking technological advances, they have a strong chance of qualifying, ploughing the savings back into their business to drive future growth, unlock new markets and innovation.”

One of the companies involved in the food and drink sector to benefit is Foodmek Limited. Foodmek, based in Tayport, Fife, is a premier supplier of processing equipment to, primarily, the food and drinks industry in the UK and overseas.

With over 100 years of combined experience, the design team specialise in tailoring all plant machinery to meet the specific requirements of their customers who engage Foodmek to design, manufacture and install bespoke equipment.

Scot Kelly, managing director, said: “We engaged EQ to assess the company’s eligibility to make R&D claims and with their support we were able to identify a number of qualifying R&D projects. The company has benefited by investing our R&D tax savings in new equipment and resources which will allow us to continue developing bespoke solutions for our customers.”

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