With years of experience in the industry, we have observed a pattern where many industries have significant investments in creative projects but a relatively low number of claims. Among such creative sectors is the cosmetics and personal care industry, which is widespread and plays a tremendous role in product development with a very low percentage of claims every year. The cosmetic and personal care sector combines material science and human science to create enhanced products that meet all consumer demands. It is a highly competitive sector, driven by a continuous strive to develop new and improved outcomes for all age groups, environments, weather conditions and skin types.
How is R&D Relief Beneficial for Your Company?
Benefits for your company can not only be in terms of revenue gain but can be in terms of retaining the capital utilised in research and development. R&D claims are exceedingly generous government incentives and can help you reduce your company’s corporation tax with R&D relief or provide R&D tax credits to reinvest in future projects.
Eligible expenditures for R&D relief claim are:
• Staff Costs
(Staff costs that are directly paid to the employees involved in the company’s R&D projects qualify for the claim. This means you can also claim staff wages, pensions, and NIC. However, qualifying expenditure does not cover administrative, security or clerical staff wages.)
• Cost of Consumable Items such as materials, fuel or power
• Software Expenditure and licence cost
• Developing and testing of Prototype
• Clinical Trials and payments made to volunteers
• Externally Provided Workers (EPWs)
• Subcontracting Cost
Research & Development in the Cosmetics Sector
In today’s competitive market, any cosmetic and personal care company can not exceed unless it focuses on continuous innovation to resonate with consumer demands. It requires scientific and technical advances to create products relevant to consumer perception and satisfy customers’ expectations. This ongoing struggle of cosmetic and personal care companies to develop something new and improved, with additional benefits, makes this sector highly innovative. Creating a new product involves many stages, from dermatology research, clinical study, consumer insight research, and formulation to testing and development.
Most of these activities qualify under HMRC’s definition of R&D qualifying projects and can help you get highly lucrative R&D Relief. Any project that is focused on the improvement of products and enhancing quality might qualify for the claim. We will explain what qualifies so you don’t miss out on this beneficial funding source anymore.
Activities That May Qualify In The Cosmetics Industry
Creation of Improved Products and Enhanced Formulations
In the creation of improved products following are the eligible activities that qualify for the claim:
- Research for the use of alternative ingredients for better results
- Research and experimentation with various organoleptic properties to create products with different colours, textures and fragrances
- Creation of products that overcome physical and chemical product constraints
- Overcoming stability and performance constraints
- Developing an improved product range
- Improving the effectiveness and absorption of products
- Developing complex formulas mixing ingredients not mixed before
Testing Prototypes
- Creation of prototypes to resolve scientific or technical uncertainties
- Testing prototypes to ensure they precisely meet the requirements of the industry
Development Process
Product development within the laboratory is not that difficult, but moving the same process to the production plant and development on that high level is quite challenging. The following activities in this process qualify for the claim:
- Batch trials before production
- Enhance development process efficiency
- Lower production costs with innovative development
- Increase output
- Reduction in carbon footprint
- Creating energy-efficient process
Innovative Packaging
- Using sustainable packaging materials and methods
- Improve packaging to enhance the product’s shelf life
Any project focused on discovering creative solutions to problems that do not have any accessible solutions by overcoming the constraints that arise qualifies.
Get Your R&D Relief Now
Constant evolving trends and fashion has put the cosmetics industry under more pressure to meet consumer demands. R&D Relief thus provides relief for cosmetic companies to help them grow.
Our R&D relief experts at Square Finance will simplify your claim process and help you prepare your robust claim. We first look deep into your business to get to know your company, gather data, and find hidden qualifying costs, so our clients get the maximum benefits and constitute your robust R&D relief claim for you.