Identifying eligible R&D clients in Jewellery manufacture
What to avoid
Firstly, it’s worth taking the time to first think about the types of jewellery manufacturing and repair companies that don’t do any eligible work. The manufacture of jewellery is a traditional and very well-established industry, so the majority of companies are unlikely to have much eligibility.
As with several other sectors we’ve discussed, the likelihood of finding eligible work is closely linked to the scale of the organisation. Small ‘cottage-industry’ jewellery manufacturers and repairers are more likely to use traditional techniques and handcraft their products, which is unlikely to involve making advances in science or technology, even where the designs are unique or innovative.
Even amongst larger companies, work that focuses on producing aesthetically innovative designs using standard techniques is not eligible for R&D tax relief. The design and production of intricate pieces that do not present engineering challenges, for example, would not require the company to make advances in science or technology.
In the area of jewellery repair, companies that focus on repairing only those items that are straightforward to fix, or from one specific manufacturer, are less likely to have to carry out eligible research and development to be able to successfully repair items.
Ok, so what should I look for?
So, now that we know what ineligible jewellery R&D work looks like, what areas should you be focussing on?
CAD/CAM designs and 3D printing
While most jewellery was traditionally designed and produced by hand, the use of CAD/CAM methods and even 3D printing has become widespread in industrial jewellery manufacture. This has led to the production of more intricate designs and items than would have been possible, which has in turn introduced difficulties to manufacturing and repair processes. Where these difficulties require advances to be made in engineering, chemistry and/and metallurgy in order for the items to be produced or repaired successfully, the company may be eligible to claim R&D tax relief.
Although synthetic diamonds have been manufactured for decades, it is only in recent years that these have become a feasible option for use in jewellery. Alongside the increase in the use of these and other synthetic stones, demand has grown for non-traditional stones such as tanzanite. Companies working to produce items using these stones may have to carry out eligible R&D to establish, for example, how these stones would react to the heat produced during standard production processes, and how to overcome any adverse behaviours and reactions to enable the production of items of acceptable quality.
In addition, the use of non-standard metals and alloys can cause similar problems in manufacture and repair. Where a company has to increase industry knowledge of how these metals behave when exposed to, for example, ultrasonic cleaning, they may be eligible to claim R&D tax relief.
Repairs where information is lacking
One of the biggest current challenges for jewellery repairs specialists are items that have been manufactured overseas but that have UK hallmarks. The materials used in these items can often behave unpredictably during repair because the chemical structure and make-up is not exactly as expected. Specialist repair companies, especially those that repair items on behalf of the consumer and a wide range of manufacturers, may have to spend appreciable time developing methods and processes to identify where the materials are not as expected and successfully repair them. Where this requires advances to be made in science or technology, the company may be eligible to claim.
R&D Eligibility Webinar
Jewellery will be one of the fields focused on in WhisperClaims' upcoming Webinar: “Identifying Eligible Clients” on May 25th, 2021 at 12:30.
We’ll be discussing how to spot innovation within accountants’ client bases and across some of the most unlikely sectors in the UK. Perfect for accountants & consultants looking to cement their understanding of the R&D scheme’s applicability across the sectors they might service!
Looking to expand your service offering?
The WhisperClaims software is the only fully-automated solution designed entirely to enable accountants to deliver cost-effective, robust R&D tax relief claim for their clients, maintaining brand identity and without the need to outsource.
- 300+ accountant users nationally
- Over 1,000 claims processed to date
- £100 million identified in eligible spend, with over £25m given back to SMEs in tax benefits
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