The latest HMRC Statistics for R&D Tax Credits has highlighted various industry sectors that have high levels of innovation, with low levels of R&D Tax Relief claims; this includes businesses in the Health and Beauty Industry.
The health and beauty industry is widespread and global. Here in the UK there are numerous small and a few larger and more well-known companies that develop health and beauty products. The industry requires a combination of material science, life science and human science to create often innovative devices, creams, gels and supplements, to name but a few. However, there are very few health and beauty SMEs actually claiming R&D Tax Credits on this work.
Innovation is key for this highly competitive industry, which is driven by the constant challenge of offering the best products for consumers. Success is often dependant on how well a company can innovate. Innovation must ally technical advances with the consumer perception of relevance, resonating with consumer insight. It must be quick and timely, demonstrating the ability to identify burgeoning trends. And, lastly, it must satisfy consumer expectations, living up to its promise.
For several years now I’ve worked with a group of companies that develop a variety of health and beauty-oriented products. Learning about their R&D is both interesting and eye-opening!
Often their work includes:
And this is just the materials science aspect! Life science work can include research into dermatology and medicine, or the effect of different ingredients on the body. There may also be research into brain science or behavioural science.
One of our clients in this industry has carried out clinical studies into fertility-friendly lubricants or the effect of Pulsed Electromagnetic Fields on pacemakers. Another has developed hair products with proven improvements for scalp and hair health. The development of vegetarian suitable supplements has involved innovative extraction and processing methods on new sources of vitamins. The range of projects I have seen in the health and beauty industry is immense!
I frequently see the development of products incorporating never before combined ingredients for complex formulation work. There may be many technical challenges faced during development that qualify as R&D including:
Recent trends in health and beauty research include the shift towards organic and bio-based products, the use of nano and biotechnology, the development of innovative men’s grooming and anti-aging solutions, and the use of sustainable packaging. Companies engaged in R&D activities related to any of these fields may be entitled to significant R&D Tax Credits.
So, if you are doing something that others in the industry are not already doing, creating an existing product in an appreciably improved way, or not following routine or conventional methodologies, then it is highly likely that you too qualify for R&D Tax Credits.
If you are interested in claiming R&D Tax Relief, but are unsure where to begin, use our online R&D Tax Calculator. Enter a few quick figures regarding your R&D expenditure to understand what your R&D Tax claim could be worth.
Or, if you would prefer to speak to someone to discuss your projects and eligibility to claim, you can get in touch with our team of R&D Tax Consultants via our online contact form, by phone – 01332 819740, or by email – firstname.lastname@example.org
Within R&D tax credit frameworks, there exist varying degrees of guidance, each with distinct purposes. These are ‘Meaning of Research & Development for Tax Purposes: guidelines’, 'CIRD Manual (Corporate Intangibles Research and Development)' and ‘Guidelines for Compliance’
There were some important announcements made regarding the future of the R&D tax credits schemes both in structure, operation and who can benefit as well as wider investment in R&D in specific sectors.
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