Why is Research and Development (“R&D”) Important for Brewers?

R&D normally delivers a cash flow benefit to a brewer.

The UK tax system provides companies with enhanced tax relief for expenditure on qualifying R&D activities. This relief can:

• Reduce existing tax liabilities
• Result in a cash payment to the company
• Reduce future tax liabilities

Why is Research and Development (“R&D”) Important for Brewers?

Brewers normally incur expenditure that will justify a significant claim for tax relief. R&D normally delivers a cash flow benefit to a brewer.

Typical areas of R&D for Brewers

Where brewers undertake projects to grow and enhance their products, uncertainties are likely to have to be overcome. Such projects will likely involve R&D allowing a claim by the company for additional tax relief. Examples of areas where qualifying R&D activities have been identified in projects are noted below.

Ingredients

New products
New chemicals
Seasonal beers
Beers to fit different locations/geographies
Beer/lager/Stout
Fruit beers
Environmental concerns
Gluten free
Low alcohol beers
Less calories/more healthy

Processes

Software development
Improvement in process to deliver efficiencies
Improvement in process to reduce environmental impact
Process to reduce salt or sugar content

Packaging

Movement from cask to bottles
Movement from bottles to cans
& vice versa
Packaging capable of being resealed
Environmental impact of different packaging
Specialist packaging to deliver a quality product outwith a bar
Increased shelf life

Environmental issues around production, storage and delivery including:

Wastage
By-products
Source of power
Reduction in plastics used
in end product and
processes to reduce
environmental impact of
beer manufacture

This information is published without the responsibility on our part for loss occasioned to any person acting or refraining from action as a result of any information published herein.

The Claims Process for R&D

1. With AAB’s Specialist R&D Engineers, the qualifying R&D projects that required uncertainties to be overcome are identified
2. With AAB’s Specialist R&D Engineers, qualifying expenditure on R&D projects are identified
3. AAB’s Specialist R&D Engineers makes R&D claim with supporting report
4. Cash Flow Benefit delivered
5. Repeat process in next year

If you would like to find out more, contact Derek Gemmell, Andrew Blair, or your usual AAB contact.