Fashioning the future

The cultural impact of fashion is well documented, but the story of its contribution to innovation and technological advancement is less well known. From the cotton mill to the Singer sewing machine, the textile and apparel industry has been an engine of human progress since the dawn of time, yet these profound and transformative innovations are often overlooked and not least by the industry itself.

Thankfully, the UK tax code recognises the benefits that trailblazing product design delivers for the wider economy and seeks to stimulate this with targeted tax relief, known as R&D tax credits. While for many fashion designers and executives, the term “R&D” conjures up images of clipboards and white coats, the reality couldn’t be further from the truth. Fashion, textiles and apparel is fertile ground for exactly the types of activity that qualify under the scheme, as designers’ experiment with materials and methods to produce unique finishes, shapes, patterns and textures.

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 fashion 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 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:

  • Materials and methods

    Experimentation with materials to achieve new shapes and fits.

  • Scaling production

    Trialling to scale show designs for production purposes.

  • Garment construction

    Experimentation with garment construction for versatility and fit.

  • Sustainability

    Testing more efficient or sustainable processes, materials and dyes.

  • Quality improvements

    Methods to improve durability, versatility or aesthetics.

  • Materials modelling

    Modelling behaviour of fabrics and materials under different conditions.

Next steps

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