Insight: Building resilience in UK manufacturing after the crisis

The factory of the future must be resilient to weather any economic storm. The all too familiar sight of empty factories, furloughed staff and cessation of production is a warning that in order to independently survive whatever nature throws at us, change is needed. Terry Cheesman from Haines Watts looks at how manufacturers can use software as a tool to build resilience.

Many of the software technologies listed below are and can be applied to manufacturing businesses across functions such as:

• Shop floor automation;
• Remote diagnostics and IoT (Internet of things) applications;
• Preventative maintenance sentinels;
• 3D design simulations;
• ERP and MRP functionality;
• 3D training manuals;
• Digital marketing;
• Real-time factory to back office integrations;
• Supply chain portal development;

The cost of implementing the above has significantly come down over the years, making the technologies more accessible. Combination funding such as Made Smarter UK and R&D Tax relief make it more attainable than you would first think, providing a de-risking mechanism for business owners. The next time around our factories must be as resiliently independent of human intervention as possible allowing them to stay open.

 

R&D Tax Credits are a Government incentive designed to reward innovation and accelerate growth in UK Companies.

Claims can be made in respect of previous accounting periods (up to 2 years) and you can even benefit if you are loss-making. In today’s climate it can be a vital lifeline, the difference in some cases of re-opening or not. HMRC has recently re-affirmed its commitment to turning around claims within their 28 day promise – this presents a very fast cashflow injection – some of our client s have had their money in the bank within a week.

R&D takes place in any sector and although it was introduced 20 years ago, there are vast numbers of qualifying companies that have not made a claim yet.

If a company spends time and money on developing new products, services or processes or enhancing existing ones, then it could make a claim for R&D tax relief.

Haines Watts’ specialist R&D team (Head Office in Hale) has successfully submitted claims for software projects, across all sectors and disciplines, relating to:

• Novel data management techniques
• Innovative methods of capturing, manipulating, protecting and transmitting data across systems and platforms
• Novel Integration of disparate modular systems
• State of the art software for new projects including penetration testing and future-proofing cyber security initiatives
• Non-standard applications for new and emergent technologies (such as a Warehouse Management System incorporating AI and Air Traffic Control applications)
• New functionality in support of existing R&D projects (software as a tool in R&D)
• Hardware and software platform integration – defining new APIs for interoperability between systems
• Actuarial modelling and Blockchain
• Extensions of programming languages and operating systems (Java, C++, Azure, GitHub, Python, PHP, C#, SQL and more)
• Interfacing dynamic design with hardware and the physical environment – AR, VR,3D simulations projection mapping, digital manifestation of real-world physics across novel environments
• Development of unique system architecture for intelligent and automated processes (including data scraping and integrated/intelligent ticketing)

Which have included activities such as:

• Defining objectives
• Identifying uncertainties
• Reviewing new and existing technologies
• Analysing and developing new technology
• Feasibility studies
• Product testing
• Upskilling of workforce

The main areas of costs that can be claimed in respect of the R&D activities are:

• Staff costs
• Subcontractor costs
• Consumed materials
• Agency workers
• Software
• Consumables, i.e. heat, light and power used during the R&D process

Given the evolving nature of technical requirements and bespoke customer demands it is more than likely that innovative software companies will qualify for this relief. If they haven’t already made a claim, now is the time to be review what is possible with our expert help.

Dream Big, Innovate, Grow and Succeed

With over 50 years combined experience in Tax, our specialist team can help identify and support your claim with our simple 4 step process:

1 – Identify your R&D activities
2 – Capture your qualifying R&D expenditure
3 – Prepare your R&D claim
4 – Develop an R&D strategy to maximise your future claims

We handle your claims from start to finish and work with you to ensure you are capturing all of your costs, developing a full R&D strategy. work closely with you to foster organic growth, with R&D at the core.

We advise companies of all shapes and sizes and have saved our clients over £22.6 million of corporation tax in the last 18 months alone.

To find out more and explore how R&D Tax Credits can support your business, contact Anna Fisher on 07591 204833 or afisher@hwca.com.