The hospitality sector has been one of the worst hit by lockdown measures in the UK due to the coronavirus pandemic. The on-going disaster is not only affecting small businesses but even some of the biggest names in the industry, such as Weatherspoons, Whitbread and Gourmet Burger Kitchen, to name a few. The hospitality industry is in dire need of financial support. Whilst the Government has launched support packages, for some businesses it’s just not enough. Now is the time for hospitality related companies to explore R&D tax relief and potentially claim back thousands of pounds they are entitled to.
Unfortunately, hospitality and leisure businesses are among those least likely to claim R&D tax credits mostly due to the term Research and Development not seeming to fit their activities. According to HMRC’s Research and Development Tax Credits Report 2020, there were less than 1000 R&D claims from businesses within the ‘Accommodation and Food’ industry sector. This is an incredibly low number for an industry that is by nature innovative in having to attract customers by staying up to speed with industry, venue and people trends.
Please think of activities you have participated in focused around Process Improvements, Innovation and Business Progress as these fit the industry better, don’t think that R&D is just for white coats and engineers. There are a lot of R&D activities that go on behind the scenes in hospitality businesses, yet they are never claimed for. For example, R&D activities in the food and beverage industry may include:
Food & Beverage
- Improving the texture, taste and nutrition of F&B formulations
- Testing sustainable or new ingredients
- Creating new samples within a test kitchen environment
- Micro-Brewery technologies
- The creation of new packaging to improve durability and shelf life
- Using environmentally friendly materials in packaging, or alternative materials to improve packing
- Guest interaction platforms including bespoke or customised apps.
- Introducing new methods that will reduce costs and improve productivity or product/service consistency
- Improvements to equipment and machinery to ensure food and drink is handled safely
- Improvements in fire safety control within venues
- New methods for reducing food waste, glass, scrap, contamination and spoilage
- Efforts to using utilities, water, fuel and energy more efficiently with the introduction and integration of new technologies
- Testing out new processes to convert waste to energy
ZLX are proud to be helping a number of hospitality focused companies gain much needed cash to enable them to get through to when they can go back to normal. We have helped with numerous payouts for hotels, pubs, restaurants, venues, associated supply companies, distribution and event production and management companies.
These rebates can be sizeable and our average return to clients currently sits at £77,000. The key to this cash is a Ltd businesses’ past activities. Research and Development is not normally associated with F&B but think of the term ‘innovation and process improvements’ then you may well realise that your business does qualify for a rebate.