Manufacturers to increase focus on innovation?
UK manufacturing executives see innovation as a pivotal part of their strategic focus going forward, according to the KPMG Global Manufacturing Outlook 2015, a survey of 386 senior executives, released earlier this month.
Key takeaways from the report:
- 50% of manufacturers say their strategic focus is innovation-led
- 32% cite the development of new products and R&D as a top strategic priority
- 30% say R&D inefficiency is their biggest challenge
- 41% of executives say their primary strategy for innovation is to pursue breakthrough advances
- 74% are willing to spend upwards of 4% of revenues on R&D over the next year
Innovation a pathway to future growth
Chris Hill, partner at Hawsons, said: “It is clear that UK manufacturers see innovation as a top strategic priority and ultimately as a pathway towards achieving and driving future growth and productivity. Manufacturers are increasingly looking for breakthrough innovations and technological advances and it is no surprise, given the pace of competition within the industry, that investment in R&D is expected to rise again this year. It is crucial, however, that manufacturers maximise their tax-saving opportunities.”
Attractive UK corporation tax incentives
Stephen Charles, tax partner at Hawsons, said: “With the government fully supporting innovative businesses, attractive UK corporation tax incentives are now potentially available, from the costs of research and development through to the generation of profits, if the technology is patented.”
“R&D tax relief is a widely available, yet often overlooked tax relief. Broadly speaking, the relief applies to companies undertaking projects which aim to seek an advance in science or technology. An important point to remember is that to claim R&D relief, you don’t have to work in a lab or wear a white coat; we have submitted successful claims for a large number of manufacturing businesses and have experienced situations where the business did not consider claiming as a viable option. It is absolutely vital, whether you are developing a new product, service or process or materially improving an existing one, that you carefully consider all possible claims.”
Speaking about another attractive tax relief, Stephen adds: “The patent box also provides a reduced rate of corporation tax for manufacturers and is one of the most generous tax incentives for companies exploiting patented inventions or certain innovations protected by patents.”
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