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R&D Tax Credits for the Vaping sector

Within the latest HMRC statistics on R&D tax credits, we can see that 19% of all claims that are made under the SME scheme, were for companies operating in the “Professional, Scientific & Technical” sector. This accounts for 25.5% of the total value of claims.
The average claim value was £71,648.

Research and Development Tax Credits within the vaping and e-liquids industry

Evolution comes in many forms, with the vaping industry being no different. For companies to build and maintain a competitive business within this sector, they are constantly needing to innovate. This is achieved by formulating new recipes and for for their e-liquids. For others it’s by developing and improving the atomisers needed to dispense the products to the end consumers. Being eligible for R&D tax credit centres around two key areas. You need to be either:

Producing new or improved products.

Design and develop a product involving some degree of uncertainty, for which the answers were not obvious.

Examples of technological uncertainty in the vaping and e-liquids industry

Flavour extraction
E-liquids come in a variety of flavours but for these to be extracted for use, they need to be extracted from the source. Fortunately there are a range of established processes in place, but many of these can involve using harsh chemicals. Other methods will sometimes need to undergo a heating, steaming or bleaching process, which can all make the product unsuited for use. As a result, there is a need to develop new techniques that have not been used within the vaping sector.
Elimination of residue on atomisers
Once a new flavour or formulation of e-liquid has been produced, it will enter a period of testing. This can result in more testing as in some circumstances, it’s possible for a build up of residue to occur on certain types of electronic atomisers. Because of this there is a need to reformulate the e-liquid, which often results in a high level of trial and testing.
Filtration of e-liquids
Developers of e-liquids can encounter a further raft of technological uncertainties in the filtration of natural ingredients from the e-liquid. As this is an evolving industry, there are few existing methods in place, which results in the need for new methods to be developed. Without suitable filtration an e-liquids can leave a residue on atomisers, which creates a poor user experience.

We were really pleased with the cheque we received from HMRC. It will enable us to expand export sales in Europe and, of course, invest in the development of more original and exciting flavours.

Pick up the phone to Fiscale, they will definitely be able to help you! There’s no risk to your business whatsoever and you could be missing out on a sum of money, that would help grow your business.


Archie Powell, Decadent Vapours

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