R&D Tax Credits for Chemical Engineering

Combining Chemistry, Physics, Mathematics and Economics, Chemical Engineering is the discipline that seeks to create useful end products and other outputs.

From experience, we have found that although various aspects of Chemical Engineering do not qualify as R&D for tax purposes, this is a field that is generally highly eligible.

For a Chemical Engineering Project to qualify for R&D Tax Credits, it needs to adhere to the R&D Tax Credits guidelines (known as the BEIS guidelines). These guidelines apply to all industries (rather than just Chemical Engineering), but this briefing will help you assess which projects will be eligible and subsequently which of the project costs will be includable within a claim.

The R&D eligibility criteria define that for a project to qualify:

The Scientific or Technological Advance needs to be relative to the baseline of knowledge and capability in the field of Chemical Engineering. Thus, it is not sufficient to be applying publicly available Technology to a business problem. Furthermore, commercial and business advances are not themselves viewed by HMRC as Technological advances and so not demonstrating that a project meets the BEIS guidelines. Often, we find that in Chemical Engineering projects there are Technological Advances hidden behind business Advances, but it is essential to bring out the Technological aspects of a project when supporting a claim.

Thus, it could be that your team is seeking to appreciably improve the performance of a plant, by going beyond the information in the public domain and undertaking reactor analysis using laboratory data and physical parameters. Alternatively, it may be that your engineers are experimenting with crystallisation and filtration techniques to prepare reactants and control energy transfer into the reactors.

It may also be that your team is developing new control systems, which we often find to be eligible for R&D Tax Credits. Please find more information about R&D for software development projects.

Technological Uncertainty on a Chemical Engineering project would be where a competent professional is uncertain whether the Technology is feasible, or what the best way to achieve the Technology in practice would be.

How to improve a plant performance may be uncertain, as standard methods have not yielded the gains required and there is what combination of techniques would be able to lead to the necessary level of performance is uncertain.

Costs required to overcome (or seek to overcome) Technological Uncertainty can be included within your R&D claim. This definition means that the scope of your R&D Tax Credits project will often be different to that of your Project for general business purposes. The R&D project will start when work to resolve Technological Uncertainty commences and will end when the work to overcome the Uncertainty finishes (either because the Technologically challenging issues have been tested and found to work, or the project cancelled).