Energy and Utilities R&D
In recent weeks the UK’s energy supply network has been plunged into chaos by a perfect storm of supply shortages and the continued fallout from the UK’s greatest act of national self-harm: Brexit. There are now genuine fears that a wave of energy suppliers will collapse and that households will be saddled with unaffordable bills. As the colder weather draws in, Britain faces a worrying winter outlook.
As economies begin to recover from the fallout of the pandemic there have been renewed surges in the demand for energy. Over the last year, gas prices in the UK have more than quadrupled. In the last month alone, prices climbed by 70%.
The global gas crunch is particularly bad news for the UK. Around half of the UK’s electricity is generated by burning fossil fuel in gas-fired power plants. Yet, despite the obvious reliance on fossil fuels for electricity, both in homes and in heavy industry, the UK has some of the lowest levels of gas storage capabilities in Europe, leaving the market uniquely exposed to the supply crunch.
In an industry where demand is high and resources are finite, the requirement for innovation and research and development activity turns critical. Companies engaging and investing in the development and design of alternative energy systems and solutions will inevitably be faced with technological challenges and uncertainties.
The R&D tax relief scheme rewards companies for work often undertaken in the ordinary course of their business, attempting to develop and innovate in their sector. The scheme is an opportunity to claim either a reduction in corporation tax of up to 24.7p for every pound of qualifying expenditure or, for loss making companies, a payable tax credit of up to 33.35p of any pound spent on qualifying R&D activity.
Typical qualifying activities within this sector can include:
- Design and development of renewable energy systems
- Design and development of software which facilitates intelligent energy use
- The development of electric vehicle powertrains and technologies
- The development of wind turbine technologies
- Designing and developing new or improved electrical switching systems
- Developing high-capacity battery systems for the storage of renewable energy
Whether you are making a claim or not, if you would like us to undertake a complimentary health check to ensure that you are maximising this opportunity, please get in touch and email us at hello@yes.tax
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