Consumers are becoming increasingly interested in the ethics of the companies they use and the footprints that their products have, resulting in regulation changes around the use of materials that are harmful to the planet. As the government continues to come under pressure and the potential for further clamp downs on the production and use of plastics is on the horizon, it makes sense for companies to be looking at how they can make their products and processes more environmentally friendly – whilst still being cost-effective.
Corporate tax relief for Research & Development
Following the success of the microbead ban and the 5p tax on plastic bags, other changes to come into effect are bans on plastic straws, drink stirrers and cotton buds. Companies that make, sell or utilise these products are having to come up with fresh ideas but may be able to take financial support from Research and Development (R&D) corporate tax relief.
The R&D relief is available for companies that are working on innovative advancements in science and technology. Even if the particular research project fails to come up with anything viable, the relief can still be claimed. This makes it much safer for companies to invest time and resources into making environmentally friendly developments. To qualify, the company needs to demonstrate a number of things:
- How did the project seek to advance science or technology?
- An element of uncertainty that needed to be overcome
- How did it try to overcome the uncertainty?
- Provide an explanation of why an industry professional couldn’t easily work out the advancement
The project must aid the industry and field as a whole, as opposed to being specific to the company, but it can seek to improve an existing product, service or process, as well as working on entirely new ones.
Create a USP for your company’s offering
Alongside the financial support and the philanthropic aspect of making eco-friendly adaptations to your business, it also creates new opportunities to align with your customers and show that you understand and share their values. This in turn creates more meaningful interactions with the consumer and helps develop brand loyalty. If there are other companies offering a similar product or service then giving your business a visible conscience can be a really strong selling point.
With the R&D relief in mind, think about what innovations could push your industry forwards. Is there a way you could improve the credentials of your packaging options? Could the manufacturing process be greener? Is there a way to use the waste products your trade creates? Would a new piece of software improve your industry? Once you have identified an area that needs attention, make a plan to try and solve the problem. Form a team and get to work, making sure to keep your customer base in the loop. Let environmentally friendly be wallet friendly, for you.
Neil Smith Accountancy provides first rate small business and company start up accounting services, as well as offering practical advice to help your business succeed in these tough times. Get in touch today for a free consultation, and see what our team of professionals can do for you.