Microbreweries could be missing out on thousands of pounds of untapped cash!
In a recent poll, we found that up to three quarters of craft breweries across the Midlands were unaware of a research and development tax credits scheme that could see much needed funds poured back into the business.
The government’s R&D tax credits scheme is available to any business investing money in innovation, but there is a misconception that it is only available in scientific applications.
Many breweries don’t realise that the development of new flavours of beer could make them eligible to apply for tax credits with an average claim being around £10,000.
In these unprecedented and challenging times, having this money on the way could make a massive difference.
As accountants specialising in craft breweries and micropubs, we know there is continual investment being ploughed into the development of new ales.
The demand for vegan beer in particular has seen this skyrocket over the last couple of years.
R&D can also be used for breweries who have switched to a new way of selling. This could include investment in a new bottling process to facilitate home deliveries after always selling in cask, something a lot are doing at the moment to maintain an income.
These could all meet the criteria that would allow them to claim back cash through R&D tax credits.
Development costs in the brewing process can include buying new ingredients and equipment, time spent in man-hours on research and development and more.
We’re urging breweries to pursue claims from the past two years.
These could bring returns of around half their investment costs – that’s potentially thousands of pounds back in the business.
Microbreweries are still operational and trying to maximise income from consumer delivery services but their mainstay business, supplying to the hospitality industry, has been decimated leaving them struggling to survive.
We spoke to 12 local microbreweries in the West Midlands, which accounts for a fifth of the 54 we know of in this region. Out of the 12, only three were aware of the R&D tax relief and only one of these had pursued it through a formal claim.
If this is indicative of the wider picture, it could mean 75 per cent of microbreweries are missing out on potentially life-saving cash at this time.
Get Smart Accountants is working closely with Helen Gordon of Woodshires, an expert in the R&D claims process, to help breweries submit successful applications.
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