PSS TAX · SERVICE 07
AN R&D TAX CREDIT SPOTTER GUIDE
The Simple Test
Manufacturers don’t need to be inventing entirely new products to undertake R&D.
R&D may arise where engineers and production specialists are trying to make a genuine technological improvement to a product or manufacturing process and cannot readily determine how to achieve the required performance, tolerances, reliability, repeatability, efficiency or manufacturability.
Manufacturing
Don’t rule it out just because…
The finished product isn’t new
The customer specified the required outcome
The R&D happened on the factory floor
Existing machinery was modified rather than replaced
The objective was reducing cost or waste
The development concerned the manufacturing process rather than the product
R&D vs probably not R&D
Potentially R&D
Developing and trialling a new production method to manufacture a component consistently within tolerances that established processes couldn’t reliably achieve.
Probably not R&D by itself
Purchasing a newer production machine and using it according to the manufacturer’s established operating parameters.