Typical claim values for food and drink businesses
Food and drink manufacturers typically claim between £15,000 and £60,000 per year under the Merged RDEC Scheme. The range reflects significant variation in development activity — a business that spends most of its time on routine production with occasional new product trials will be at the lower end, while a business that systematically develops and tests new formulations, processes, or ingredients will often claim significantly more.
Three qualifying activity examples
The following are common scenarios where food and drink businesses have qualifying R&D activity — often without realising it.
1. Reformulating a product to remove an allergen without compromising texture, taste, or shelf life
A bakery manufacturer was asked by a major retail customer to produce a gluten-free version of one of their core product lines that was indistinguishable in texture and shelf life from the original. The technical challenge was substantial — gluten plays a structural role in baked products that is difficult to replicate with alternative binding agents. The NPD team conducted over 40 formulation trials across 14 months, working with food scientists to test different combinations of hydrocolloids, alternative flours, and processing parameters. Multiple approaches failed to achieve the required texture or shelf life before a workable formulation was found. The uncertainty, the iterative experimentation, the involvement of scientific principles, and the non-obvious outcome all make this qualifying R&D. Staff time during the development phase, ingredients consumed in trials, and any external food science consultancy costs all qualify.
2. Developing a novel production process to achieve a required throughput at a new facility
A soft drink manufacturer was scaling production to a new facility and found that the process parameters that worked at their existing site — mixing speeds, carbonation levels, fill temperatures, line speeds — produced inconsistent product quality at the new facility's scale. The interaction between the new equipment and the product formulation created unexpected outcomes that required systematic investigation to understand and resolve. The team worked with process engineers over several months to identify the root causes and develop adjusted process parameters for the new environment. The qualifying R&D is in the systematic investigation of the technical uncertainty — the outcome was not predictable and required experimentation. This is a common scenario for growing food manufacturers and a frequently overlooked qualifying activity.
3. Developing a plant-based alternative to an existing animal-protein product with equivalent nutritional and functional properties
A chilled foods manufacturer developed a plant-based protein product designed to match the nutritional profile, cooking behaviour, and mouthfeel of its meat-based equivalent. The technical challenge was significant — plant proteins behave very differently from animal proteins during cooking, and achieving similar texture required experimenting with novel combinations of plant protein concentrates, methylcellulose, and flavour compounds. The team worked through numerous formulation iterations, conducting consumer sensory panels alongside technical testing, before arriving at a product that met both the functional requirements and consumer acceptance thresholds. The development costs — staff, ingredients consumed in trials, sensory panel costs, and specialist food science consultancy — all qualify as R&D expenditure.
HMRC scrutiny level — medium
Food and drink manufacturing is a well-established sector for R&D claims and HMRC has clear precedent for the types of activity that qualify. Claims from this sector receive medium scrutiny — higher than life sciences but lower than digital or construction. The main risk is insufficient documentation of the development process, or including routine production improvement work alongside genuine NPD activity without clearly delineating the two.
One specific area HMRC looks at carefully in food and drink is the distinction between genuine product development (qualifying) and recipe adjustment or quality improvement work (generally not qualifying). The line is whether the underlying technical challenge required resolving genuine uncertainty — not just iterative refinement of a known process.
Common mistakes food and drink businesses make
Not claiming on ingredients consumed during development trials. Consumable materials — including food ingredients used in development batches and trials — qualify as R&D expenditure when they are consumed as part of the qualifying development activity, not sold as finished product. Many food manufacturers assume only staff costs qualify and overlook the ingredient costs consumed during NPD. For a business running extensive formulation trials, these costs can be significant and are fully claimable.
Treating scale-up as separate from the original development. Scaling a product from pilot to full production often involves resolving additional technical uncertainties — about how the process behaves at scale, how equipment interactions affect product quality, or how production line parameters need to be adjusted. This scale-up phase often qualifies as continuing R&D, but many businesses treat it as routine production ramp-up and do not include it in their claim. A specialist adviser will identify these additional qualifying periods that a generalist accountant often misses.
Ignoring regulatory compliance work that involved genuine technical uncertainty. Reformulating products to meet changing food safety regulations — reduced salt levels, sugar reduction requirements, allergen labelling changes that required reformulation — often involves genuine technical uncertainty. If the reformulation required resolving technical challenges around taste, texture, or shelf life, it is not simply compliance work — it is R&D that happens to be triggered by a regulatory requirement. The regulatory trigger does not disqualify the work; the technical content qualifies on its own merits.
If your business has an active new product development programme — including product reformulation, sustainability-driven ingredient substitution, or novel process development — there is a high probability of qualifying R&D activity in your accounts. The question is not usually whether R&D exists, but how much of it has been correctly identified and claimed.
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