Changes in economic and operational climates are regular occurrences for the UK metal fabrication industry.
Since 2008, business owners of metal fabrication companies have had to deal with and adjust to supply chain issues; outdated equipment; fluctuating client demands and a need to maximise efficiency without compromising on quality.
Despite the challenges, many metal fabrication businesses have stood the test of time and improved their business prospects. One way that they have achieved growth is by taking advantage of a government incentive; one that is designed to encourage growth and innovation.
Research and Development Tax Relief for Metal Fabrication
In order for many metal fabrication companies to succeed, additional efforts and problem solving is needed to meet the technological advances required by their clients within the construction sector, renewable energy and automotive industry.
This of course calls for metal fabrication companies to spend time researching new techniques, improving manufacturing processes or developing and testing prototypes; all of which are classed as research and development, or R&D.
Unfortunately, many manufacturing businesses assume that R&D is synonymous with laboratories and therefore miss out on the opportunity to make R&D tax claims; failing to realise that activities conducted to support the needs of their clients could be classed as research and development.
Claiming R&D in the Metal Manufacturing Sector
With the description for R&D tax relief as an advance in overall knowledge or capability in a field of science or technology, it can be tricky to determine what constitutes R&D within the metal fabrication or manufacturing industry.
However, metallurgy and fabrication technology falls nicely into the bracket for R&D. Therefore, if a metal fabrication business knows is using time and resources to improve manufacturing processes or reduce failure rates, the expenditure on those activities could be qualify for R&D relief.
For example, one such steel fabrication company came across an issue when manufacturing screw conveyors for high temperature applications. They experienced an unusually high failure rate in specific welds along the shaft.
With no known solution available to this particular issue, the company needed to investigate why the failures were happening and to develop a solution. Eventually they were able to develop a modified process which reduced the failure rate but didn’t solve the problem completely.
As the company had taken a risk by using their time and resources to improve their understanding of the failures, they were successful in achieving a substantial R&D tax relief claim that helped sustain their business and provided them with the funds to make continue to investigate the problem and make further improvements.
Benefiting from R&D Tax Claims in the Metal Fabrication Industry
Could your metal fabrication business be conducting R&D without realising?
Typical activities within your sector for R&D could include:
- Developing new welding procedures
- Processes designed to improve metal characteristics
- Investigation of dimensional stability issues, such as planar anisotrophy
- The development of speciality tools or jigs
- Research into sheet metal thickness, tension and stretching
- Modifying process or procedures to meet unique client specifications
- Designing and testing prototypes
- The use and investigation of alternative metals and chemical compounds to improve end products
Being aware that activities within your metal fabrication business can constitute R&D, will allow you the additional freedom to develop and test new methods and products that could set you apart from your competitors.
However, you no longer need to guess if a planned or past activity can be used to claim R&D Tax Credits. With our help, you can maximise the chances of knowing what activities are R&D, as well as increasing the likelihood that HMRC will agree your claim and provide valuable tax relief.
All that is required is saving this number or email into your contacts, and any queries or plans you have that you feel could qualify for R&D can be clarified and applied for professionally.
For further details on how to claim visit our frequently asked questions page.