Speaking at a Food and Drink Federation (FDF) webinar, Angela Coleshill, the organisation's employment, skills and corporate services director, said it was crucial to raise awareness of the R&D tax credit system because "innovation is the lifeblood of the industry", accounting for £300M of firms' expenditure each year.
She added: "Many of the members we speak to are confused by the complex UK innovation environment, the bodies involved and the initiatives launched. Many businesses may be missing out on funding for activities that are already underway."
Ann Minson, a tax credit specialist at advisory firm Grant Thornton, said the two most relevant areas for manufacturers were R&D tax credits and the new Patent Box scheme.
While many food and drink firms are aware of the former ̶ which provides varying levels of tax relief depending on the size of the company for novel scientific or technical advances for products or processes ̶ few appear to appreciate the scope of their work that is eligible for tax relief under the scheme.
'Missing out'
"The food and drink sector is increasingly active in seeking R&D tax relief," said Minson, but added: "even those firms that have claimed before are often missing out".
The main reason for this, she said, was because firms were not always aware of the full range of activities that could be claimed against.
One strand that is often missed off claims comes under the heading of Qualifying Indirect Activities, and includes costs such as maintaining the equipment used for R&D, the strategic planning behind it and for services such as lab cleaning.
Secondly, many food manufacturers are also not aware that they can claim against bills for utilities and "consumables" such as computer software.
"Payment for water use is often missed off claims," added Minson.
Benefit
After applying for the R&D tax credit, Minson then urged manufacturers to use the new Patent Box scheme to protect their work and benefit from a second tax benefit.
Introduced in April to allow companies to use their inventions to qualify for tax breaks, that scheme cuts the amount of corporation tax they pay on profits generated by UK-owned intellectual property by 10%.
"The two schemes have been designed to dovetail together," said Minson, who added they provided an attractive package of benefits for businesses that innovated.