The use of single use plastics and the damage it has done to the environment and our oceans has hit the headlines in recent times and has had a significant impact on consumers’ behaviour and how they view plastics generally. As a result of this, there has been pressure on governments to be seen to be taking action on the use of plastics.

From April 2020, certain single use plastic products will be banned in the UK. There is also the potential for further legislation to come in, impacting on plastic and its use in the future.  This could have a significant impact on companies that use plastic in the production of their products. 

Companies need to start thinking and planning now, if they have not already done so, for alternatives to using plastics and looking into how to make the plastics they use and manufacture more durable and environmentally friendly.

When looking into alternatives, there may be research involved in developing new techniques or products.  Any research and development undertaken by a company could qualify for R&D tax relief. This could help to reduce the company’s corporation tax liability or even lead to the company receiving tax credits in certain circumstances.

Broadly speaking, in order to qualify for R&D tax relief, HM Revenue and Customs state that the company must be carrying out research and development work in the field of science or technology.  This would include overcoming difficult technological problems, creating new processes, products or services, making appreciable improvements to existing ones and even using science and technology to duplicate existing processes, products and services in a new way.

In addition to potentially qualifying for R&D relief, by developing new products that are more environmental friendly, your company can capitalise on a new-found engagement with customers, aligning your own environmental concerns with those of the consumer.  It demonstrates to customers and the general public that the company is aware of its impact on the environment and is actively looking to reduce this impact. This can therefore become a considerable unique selling point for your brand, whilst making a positive difference at the same time.

To summarise, by developing new technologies, processes and/or products, your company could not only benefit from R&D tax relief, but also be seen to be more environmentally conscientious, and the long-term benefits are therefore considerable.

Our specialist corporate tax team can assist in helping you claim R&D tax relief, understand where it qualifies, and whether it can potentially reduce your corporation tax liability.  If you would like any advice or assistance with this, then please contact one of our corporate tax specialists.