Hospitality & Leisure has been one of the most affected sectors hit by lockdown measures in the UK due to the coronavirus. Although the government has provided various support packages throughout the pandemic (for most businesses), businesses can always take more help.
R&D Tax Relief could be that something more. In fact, hospitality and leisure businesses are one of the most least likely sectors to claim R&D tax relief. That’s a lot of businesses potentially missing out on R&D tax relief because they simply don’t believe they qualify. Whilst those who are claiming possibly aren’t claiming as much as they could.
If ever there was a time to understand whether R&D Tax Relief is relevant for your business, it’s now. We recommend that you reach out to ALL clients or prospects in hospitality and leisure reach out to determine if they could be claiming.
And if they already are claiming, they might be able to maximise that claim further.
What projects could qualify as R&D:
Despite being one of the most underclaimed industries, the types of project that could qualify seem limitless!
Here’s some examples of projects in hospitality and leisure that have qualified to claim:
- Investing in complex website and software application development
- Developing bespoke or customer apps for guest interaction
- Improvement or development of customer online booking portals and systems to drive efficiency.
- Using new technology, like GPS or AI, to improve customer experience (online, or face-to-face)
- Using technology to make an administrative process more efficient
- Investing in data management and analysis
- Developing new processes to reduce costs and improve productivity or service consistency
- Improvements to fire safety control within venues
- Investing in technology, specific methods and processes that help to preserve listed buildings
- Developing new processes to reduce food waste, or any other waste materials
- Use and integration of new technology, to enable more efficient use of utilities, water, fuel and energy
- Testing new processes to convert waste to energy
- Developing apps to help the business to manage energy consumption
- Developing new techniques or dishes in restaurants or bars
Case Study 1:
A Hotelier Group invested in trialling new technology and process to take their food waste and generate energy to feed back into their various sites. Costs claimed were for subcontractors and materials used in the testing phase.
Claim size: £25k costs, £6.2k corporation tax saving.
Case Study 2:
A Tapas Restaurant chain developed a bespoke online booking system for ordering food from their restaurant menu to be delivered at home. Costs claimed were predominantly for subcontracted developers, cost of supplies and software licenses.
Claim size: £24k costs, £8k cash refund from HMRC.
Case Study 3:
A Travel Agency developed a bespoke customer app for enhancing and improving the communication between the agency and customer, from booking to during the holiday. This involved investigating in technology to build a communication platform accessible from anywhere. Costs claimed were predominantly for subcontracted developers.
Claim size: £40k costs, £10k corporation tax saving.
Case Study 4:
A Gastropub developed a menu with different options for all menu items, to cater for different diets, whilst maintaining a uniform appearance and taste/texture experience to the ‘standard’ menu options. This took careful thought and planning, with rounds of testing and refinement. Costs claimed were for time spent by the chef and kitchen support staff in developing the new dishes.
Claim size £7k cash refund from HMRC.
Am I eligible to claim?
The key questions to ask yourself for any project you have undertaken are:
- Have you gone beyond “the norm” within your industry?
This could be using new techniques, or re-thinking how something can be achieved because you were constrained by conventional methods. This could be from the types of ingredients/materials/components used, all the way to the overall process and project management.
- Have you then had technical uncertainties and challenges in achieving what you have set out to do?Did you know how you were going to achieve the end goal when you started? Or was it uncertain because of the new or different way were approaching it?
Don’t let clients miss out
If you think there is even a small chance a client might be doing some activity that could qualify for R&D Tax Relief, book a call with Tim. Let’s get some money back in your clients’ businesses.