R&D Tax Credits aren’t just for businesses in the technology and science industries. As this story from a huge takeaway restaurant chain proves.
What R&D does a takeaway restaurant do?
The Chopstix Group serves five million takeaway meals each year at its 70 noodle bars throughout the UK. It recently got £190,000 in R&D Tax Credits for a variety of R&D projects. These include:
- Developing their curry sauce recipe, so that it retains its quality and flavour when mass produced. This took nine months and had a variety of ingredient procurement issues to contend with.
- Creating a special batter just for one of their prawn dishes.
- Improving the potato starch crispy coating for chicken that’s to be cooked in a wok. The issues here were the adhesiveness of the coating during cooking and taste experience.
- Taking the necessary 12 months to make a new cauliflower rice that they plan to serve soon.
- Increasing efficiency by improving cooking processes and the way their kitchens function.
Every single one of these developments meet HMRC’s criteria for claiming R&D Tax Credits. Just because it’s defined as a ‘scientific or technological improvement’ doesn’t mean you have to be working in a white coat in a lab.
Lots of people also assume that the result must be a new product or process – like the cauliflower rice. But this isn’t the case. It can be overcoming a smaller issue within an existing product or service – like taking high quality curry sauce to a mass market level.
So it’s not just for certain types of businesses then?
The R&D Tax Credits Scheme and RDEC tax relief scheme for large companies are both open to applications from all businesses. It’s your R&D project that must eligible, not belonging to the science or technology industries.
It’s about looking at what you do through the lens of the R&D criteria.
Catax’s partner director Chris Hulme advised Chopstix on their successful R&D tax claim. He says: “Chopstix is a great example of how food industry experts can take just as much advantage of R&D tax incentives as firms working in spheres that are more traditionally associated with technical innovations, such as aerospace and pharmaceuticals.
“The reality is that the R&D tax credit scheme creates a very level playing field for companies in all sectors but many still aren’t claiming their entitlement. With the aftermath of the pandemic threatening to make itself felt in the economy for years to come, it has never been more important that they do.”
What difference does an R&D tax relief claim make?
Managing director of Chopstix Group, Jon Lake, explains how important its been for them:
“We’ve re-engineered a number of our dishes because, while it takes skill to create great flavours, it takes even more know-how to ensure that they can be mass produced and kept consistent. We’re serving millions of meals a year and customers want to know that they can get the exact same product they love no matter what branch they walk into.
“That’s one of the key challenges in the quick service restaurant sector but R&D tax relief, and the extra cash flow that it has effectively created, has helped us to invest fully in this area. This has helped us to strengthen our proposition heading into one of the most difficult and competitive periods the restaurant industry has ever faced due to the pandemic.
“We’re most proud of our curry sauce. It’s a magnet for our brand but as the number of our outlets grew rapidly, we needed to make changes so it could be produced at scale while retaining that must-have flavour. It took nine months to get that right. The cooking time was a big factor as some ingredients react differently if cooked for too long.
“It was a huge undertaking but well worth it. Single dishes that people return for time and again have the power to make or break businesses in this industry and we know the power of that.”
The real question is, what difference will an R&D tax relief claim make to your business?
Perhaps reading about Chopstix’s successful claim will make your look at your R&D from a different angle. It just goes to show, if you’re doing research and development, make sure you’re not missing out on this great tax relief.
How do I make a claim?
The average R&D Tax Credits claim we get for our clients is £49,000. This is not small potatoes here. R&D Tax Credits are worth 26p for every pound you invest in R&D work.
Give our free R&D Tax Calculator a go, to get an idea of your potential. Imagine what you could do with that.
Here’s what you need to do:
- Check that your R&D project(s) meet the eligibility criteria
- Work out which scheme you should use
- Find out which costs you can include on your claim
- Sort out the paperwork
And we can help you with all of these. We don’t want to take over from your accountant. We only do R&D Tax relief claims. Just think of us as a consulting specialist.
Speak to you soon!