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.
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.
Producing new or improved products.
Design and develop a product involving some degree of uncertainty, for which the answers were not obvious.
Because developing new e-liquids takes extensive trial and experimentation, there is often a lot of research and development (R&D) taking place. Following the initial development of the concept, the new products progress to consumer testing and a full chemical analysis. Once a product paseses these stages, it is ready for launch. Once a product is on the market, it’s not uncommon for there to be long term adjustments to the products, once they have become available to consumers.
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.
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.
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.
If the examples given above ring true for your vaping & e-liquid company, it is highly likely that you are eligible to claim R&D tax credit relief. Give our friendly team a call today to find out more