Get under the skin of innovation in your business

British cosmetics, fragrances and beauty brands play a pioneering role in innovative product development, with the sector constantly devising new product formulations to meet the skincare, olfactory and beauty needs of consumers in a sustainable and ethical way. The relentless competition that characterises the sector requires brands to constantly refine their products to maintain pace with rivals as well as invest heavily in brand building and marketing. Yet while the returns available to successful brands are substantial, the fixed costs of operating in the sector are high.

Fortunately, the UK government make tax relief available to the sector for costs incurred by businesses to overcome technical challenges relating to products, chemical formulas, and manufacturing processes. These can help firms recoup some of the costs of chemists and cosmetic engineers involved in product development as well as materials, sub-contract and software costs.

Our R&D tax credit claims process delves into every aspect of your business, from product and packaging development to manufacturing and retail processes to uncover every penny of eligible expenditure. Boosting after-tax profits and injecting additional working capital into your business.

What are R&D tax credits

What are R&D tax credits?

Introduced by the UK Government in 2000, R&D Tax Credits are designed to encourage innovation by allowing businesses to reclaim some of the money they have spent on developing new – or improving existing – products, services and process.

The opportunity for cosmetics and beauty brands

Loss-making SMEs can claim R&D Tax Credit repayment up to £33.35 for every £100 spent on qualifying R&D expenditure and profit-making SMEs can claim R&D Tax Relief which reduces their corporation tax bill by up to £24.7 for every £100. Large companies can claim tax repayment of 13% of qualifying cost

But what constitutes R&D?

Any project that seeks to; Extend overall knowledge or capability; create a process or service that extends knowledge or capability; make an appreciable improvement to an existing process, material or device; or use science or technology to duplicate the effect of an existing process, material or device in a new or improved way is classed as R&D.

What qualifies?

If you solve technical challenges (or pay your staff to solve technical challenges), you probably qualify for R&D tax credits. The examples of qualifying expenditure are virtually limitless.

Here is just a small selection:

  • Safety and effectiveness testing

    Testing products and formulas for safety, effectiveness and compliance with local regulations.

  • New chemical formulas

    Developing complex chemical compositions and product formulas, including combining existing ingredients in new ways

  • Introducing new ingredients

    Sourcing and experimenting with new chemical compounds and ingredients in product formulas.

  • Sustainability

    Reducing carbon footprint and wastage by refining processes to become more efficient.

  • Process improvements

    Improving cost efficiency and quality of products with new manufacturing processes.

  • Product testing and modelling

    Testing for hydration, emollient and exfoliative properties of product ingredients and formulas

Next steps

Download the brochure or contact us to book an exploratory discussion to evaluate your claim.