Published 12/05/2020
Modified 06/02/2023
5 min read

R&D Tax Credits for the Food and Beverage Sector

Innovation Tax give examples of the many types of activity in the Food & Beverage industry that often lead to significant amounts of funding being claimed via R&D Tax Credits.  

R&D Tax Credits for the Food and Beverage Sector

Many companies in the food & beverage industry can gain significant amounts of funding from R&D Tax Credits

The Food & Beverage industry is the UK’s largest manufacturing sector (larger than Automotive and Aerospace combined), contributing £31.1bn to the annual economy and employing over 450,000 people. Furthermore, some 97% of the UK’s 7,290 Food & Beverage businesses are small and medium-sized enterprises (SME’s) whose activities undertaken on new product development (NPD) and in resolving technical challenges in this fast-moving sector often lead to significant amounts of funding being claimed via R&D Tax Credits.

R&D Tax Credits can be particularly beneficial for SME’s in the food and beverage sector, as they can help these companies to finance their R&D activities and compete with larger companies whilst improving competitiveness; leading to increased economic growth, job creation, and cash flow.

Which Food & Beverage activities qualify for R&D Tax Credits?

Examples of the types of activity which are likely to qualify for R&D Tax Credits within the Food & Beverage sector include;

  • Improving taste, texture, and nutritional properties within a product
  • Development of new packaging solutions
  • Development and trials of new methods to extend product shelf life
  • Development of techniques which lead to reduction of costs, raw material wastage and improvement in overall consistency of a product
  • Activities to scale up production, usually from samples created in a test kitchen
  • Development activities carried out to satisfy new regulations and compliance
  • Development of new products to cater for growing market trends, such as gluten free, vegan, dairy free, low carb, reduced fat and sugar-free products, which often require an iterative development process to achieve the desired outcome
  • Development / improvements made to existing machinery to increase production capacity
  • Development of new machinery for the production of new products and ongoing testing requirements
  • Adaptation of existing processes to seek improvements in efficiency, cost and lead times
  • Improved methods for minimising risk of contamination and materials wastage
  • Removal of allergens, preservatives or artificial dyes
  • Investigative work carried out by food scientists to achieve an advance in overall knowledge and capabilities in food manufacturing
R&D Tax Credits for the Food and Beverage Sector, R&D Tax Credits for the Food and Beverage Sector, Innovation Tax
The average annual R&D Tax Credit claim benefit received by companies in the Food & Beverage industry is currently in excess of £53,000

Qualifying cost categories

R&D Tax Credits can be predominately claimed on revenue expenditure in the following cost categories:

  • Staffing Costs
  • Subcontractors
  • Externally Provided Workers (EPW’s)
  • Consumables
  • Software licenses
  • Utilities
  • Clinical Trials

Why work with Innovation Tax?

As R&D Tax Credit claim specialists, with a highly skilled team that includes technical experts who have worked in the Food & Beverage industry for many years, Innovation Tax is ideally placed to support companies in this sector in efficiently & accurately identifying the full extent of their scheme qualifying activities and eligible costs and submit a robust claim that will stand up to HMRC scrutiny; whilst also ensuring that they are fully benefiting from other Government innovation tax incentives such as the Patent Box, and maximising their Capital Allowance tax relief on commercial property assets.


It can be challenging to submit an R&D tax credit claim to HMRC’s exacting standards.
At Innovation Tax, our team of experienced sector specialists, technical and quality assurance experts and tax professionals will help you identify the full extent of your qualifying activities and expenditure and work with you to ensure the correct information is included in the claim documentation, giving you peace of mind that your claim is robust, maximised and defendable.

Start the conversation with a complimentary, no-obligation discussion.

Innovation Tax specialise in helping companies access vital innovation tax incentives and grant funding to enable their businesses to grow, increase profitability, reduce risk and enable further investment in R&D, IP and capital assets.

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