5 Ways the Motor Industry Can Claim Thousands in R&D Tax Credits
It is often mistaken that in order to claim R&D tax credits, companies need to operate in laboratories, working with chemicals and other scientific equipment, but this is far from the truth.
Any sector could potentially be eligible for R&D tax credits, and Ad Valorem has successfully claimed a large amount of relief for the motor industry. Companies in the motor industry can qualify for significant tax breaks in a number of different ways.
To illustrate this, here are five commons areas which are eligible for claims:
- Performance Parts -Motor racing is a hugely competitive sport, and performance parts are constantly being developed, and redeveloped, to help gain advantages in races. This can often involve using CAD software to design parts, prototype development, and testing. This type of work is almost certain to be eligible for tax relief.
- Safety-The safety of motor vehicles is constantly improving, with pedestrian and barrier detection being some of the more recent developments. If your company is involved in designing parts to make a vehicle safer, such as reducing the stopping distance on a braking system, you could be able to claim thousands back in R&D tax relief.
- Working with new materials-Material science is also a hot topic in the motor industry, as companies aim to make car parts cheaper, higher performance, or longer lasting. For example, Ad Valorem recently prepared a successful claim for a company which worked with carbon fibre to produce lightweight car parts. If you’re working with new materials, you could potentially be eligible for a claim.
- Environmentally friendly-Global warming is a big concern worldwide, and companies are trying to reduce the carbon footprint of their products across all industries, including the motor industry! The development of parts to make vehicles more environmentally friendly is another example of a project potentially eligible for R&D relief.
- Cheaper and longer lasting-Essentially, any improvements to vehicle parts can be eligible for R&D tax credits. This includes making parts cheaper, longer lasting, or easy to operate.
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