Brexit headwinds temper manufacturing momentum
By Tom Verner, Group Managing Director at Momentum
The Northern Ireland manufacturing sector has always been resilient.
Through depressions, recessions and tough times it has always managed to roll with the punches and emerge more wily, stronger and with a thirst of excellence and success which can only be found on these shores.
The latest report from Manufacturing NI and Tughans shows just that.
It found a sector in good health but one struggling through the headwinds posed by the uncertainty which surrounds the UK’s divorce from the European Union.
Around two thirds of manufacturing companies surveyed said their businesses were in growth mode while a hugely impressive 87% said they had recorded profit last year.
That the sector has not only managed to grow but remain profitable in the face of Brexit says a lot about the tenacious nature of the industry, as there is no doubt it has thrown a spanner in the works of many a well-worked strategy.
They achieved that by focusing on innovation so as to stay ahead of the competition, whether it lies down the road or on the other side of the world.
To do that they have undoubtedly been investing heavily in research and development (R&D) to come up with new products, with new ways of making existing products or investigating new markets.
Scratch the surface of any successful company – in the manufacturing sector or any other – and you’ll find a strong seam of R&D, one which is the key to sustained growth.
With that R&D comes the opportunity to claim one of the most generous and most under-claimed form of corporation tax relief in the UK; R&D Tax Credits.
They are designed by the government to encourage firms to invest in R&D which helped develop innovative products, processes and services.
In essence, it’s the government’s way of making the UK a more competitive economy in the global market.
Most companies are eligible for them but particularly those in the manufacturing sector and, given the challenge which Brexit is posing, they could be particularly useful for those in Northern Ireland.
But it’s worth taking some time to figure out which parts of your business are eligible for R&D Tax Credits and then to make sure you apply for them in the correct way.
Failure to do the former could mean you’re missing out on a substantiable claim and failure to do the latter could see you spend longer than needed navigating the process or, worse, in trouble with Her Majesty’s Revenue and Customs (HMRC) for mis-reporting.
Given the pressure which Brexit is putting on manufacturing companies, it is worth considering whether your business is eligible for R&D Tax Credits and if so, getting the right support to make a strong claim.
At Momentum Group we work with manufacturing companies of all sizes, preparing R&D Tax Credits for our clients, while allowing them to get on doing what they do best, running their businesses.
We are a team of R&D Tax Credit specialists who include R&D technical analysts, chartered accountants and specialist business consultants with a deep understanding of R&D tax relief legislation and its application.
To date we have examined hundreds of companies across all industry sectors, identifying R&D activities with associated expenditure for the purpose of R&D tax claims.