R&D Tax Claims for Composite Manufacture
When victory depends on a fraction of a second, even the smallest enhancement of motorsport components can provide a vital advantage.
With composite manufacture of autosport components, research and development activities are a regular occurrence; not only to create lighter, stronger or unique components, but to gain cost advantages in an increasingly competitive market.
For many motorsport component manufacturers, a UK government backed incentive is allowing them opportunity to further invest and advance their product development. The Research and Development (R&D) Tax Credit Scheme provides cost saving incentives for businesses attempting to resolve scientific or technological uncertainties.
However, in order to benefit from the R&D tax incentive, component manufacturers need to clearly expound how their R&D projects seek to overcome technological uncertainties. So, what does qualify as a technological uncertainty in order to make accurate R&D tax claims?
The following case study demonstrates technological uncertainties for one composite manufacturer seeking to claim R&D tax relief.
CASE STUDY: Carbon Fibre Autosport Components
For manufacturers producing small runs of autosport components, pushing the boundaries of their product capabilities is integral to meet the demands and expectations of the motorsport market. Therefore, claiming qualifying R&D costs for attempts to overcome technological uncertainties can often be overlooked. For the manufacturer of engineering composites in this case study, the support from the R&D tax relief scheme proved to be invaluable in helping to continue their regular efforts to innovate in the design and development of carbon fibre motorsport components.
R&D Objective: Although carbon fibre suspension components are inherently stiff, it was speculated that under a specific set of loads (such as multiple loads with different vectors to different points), these components might become partially flexible; this advance in technology could then open up new opportunities for use and performance.
So, the technical advance sought would be to discover if this flexibility could be achieved with carbon fibre alone, or if it would be necessary to integrate semi flexible materials or structures.
Achievement of this advance however, was beyond current existing knowledge and would require extensive R&D activities due to the very small amount of information available in the public domain. This, of course, would identify a number of technological uncertainties.
The Technological Uncertainties for Carbon Fibre Innovation: The enhancement of carbon fibre suspension components created a number of technological uncertainties before a suitable solution could be found. The most significant of these uncertainties included:
- How to achieve the bonding required between the carbon fibre and non-carbon fibre elements of the structure, and how to overcome the laminar shear strains between the layers which could become a source of failure when exceeding the critical flex point.
- In addition to withstanding shear forces, how would they counter the failure modes of delamination?
- How could they achieve the positional accuracy required for the flex laminates and overall component; which configuration path could they choose?
- Which potential flexible material would provide the required combination of strength, at the desired mass and rigidity thresholds? Could the best combinations be integrated considering the above technological uncertainties?
Due to the multiple and often conflicting uncertainties, there would be a need to develop significantly more prototypes, trial manufacture, testing, jigs and tooling than previously anticipated for routine composite manufacture. Costs which could qualify to be compensated through the R&D tax scheme.
Claiming Qualifying Costs for Innovation in Manufacturing
When claiming for qualifying costs through the R&D tax scheme, success in actually achieving the technological advance is not always required. As long as the R&D project claim clearly demonstrates that technological uncertainties were faced when working to achieve a worthwhile advance, then a number of costs can be claimed through a cash incentive or valuable corporation tax reduction.
Are you claiming your cash incentive for qualifying research and development activities in composite manufacture?
For expert advice and support in making accurate and successful R&D tax incentive claims, please get in touch today.