beauty R&D 2
Debbie Hancock

Debbie Hancock

Owner of Southbourne Accountancy & Business Services

Finding R&D in Beauty & Cosmetics

R&D Tax
Relief might not seem glamorous, but it is incredibly relevant for businesses
in the beauty industry. There’s a huge amount of companies in the UK developing
beauty and cosmetic products from new start-ups to big multinational brands. That’s loads of innovation! It’s an industry pretty much driven by the need to produce the best products for consumers and success is dependent on how well a business can continue to innovate. This is mainly by using science to create a human benefit through devices and appliances, creams, make-up, and health supplements.

But surprise, surprise, R&D tax relief isn’t widely known about by SMEs, the businesses who could really benefit from the cash injection most, to take their businesses to the next level.

What projects
could qualify as R&D?

Qualifying businesses are often investing in activity like; developing materials, coming up with new formulas, developing fragrances and tools, equipment or technology.

Here are some examples of research and development projects that have qualified for R&D Tax Relief in the beauty and cosmetics industry:

  • Designing & creating new products or processes
  • Testing products against UK health and safety regulations and other legislation
  • Testing complex formulae for products or mixing new combinations of ingredients
  • Improving quality of products
  • Improving cost efficiency of products
  • Developing processes and products to be more energy efficient and reduce waste

·       Developing products without the use of readily available ingredients but still maintaining the same price point and performance characteristics.

·       Devising new ways to scale up production whilst retaining product composition and stability

·       Developing products to be apportioned out in one state, to then set in another e.g. liquid to solid. 

·        Developing scientifically innovative ways to overcome project constraints; like the chemical makeup, stability, and overall performance of a product without breaching legislative guidelines.


·       Using cutting edge technologies that no one else is using, meaning there is no one else to learn from. 

Case study: Developing beauty products

A Beauty Products client, imports product from overseas. They developed the ingredients, colours, fragrances to trial and produce a range of new products. Costs claimed were for chemist’s expertise, materials, and support staff.

Claim size: £15K cash refund from HMRC.

Case study: New Perfume fragrances

A perfume manufacture invested heavily into the experimentation and development of new fragrances through blending standard fragrances, to develop brand new fragrances.

Claim size: £27,000 cash refund from HMRC.

Case study: Profitability of luxury Spa Products

A manufacture of luxury spa products completed a project, to increase the profitability of their product range, without compromising the performance characteristics of the product. Costs claimed were for chemist’s expertise, sourcing new ingredients and support staff.

Claim size: £10K cash refund from HMRC.

Case study: New sensitivity formulae

A producer of sun creams and moisturisers developed a complex formula to improve the performance for sensitive skin by incorporating never before combined ingredients. Costs claimed were for chemist’s expertise, sourcing new ingredients and support staff.

Claim size: £35K cash refund from HMRC. 


The key questions to ask yourself for any project you have undertaken are:

  1. Have you gone beyond “the norm” within your industry?

    This could be using new techniques, or re-thinking how something can be achieved because you were constrained by conventional methods. This could be from the types of ingredients used, all the way to the overall process and project management.

  2. Have you then had technical uncertainties and challenges in achieving what you have set out to do?

    Did you know how you were going to achieve the end goal when you started? Or was it uncertain because of the new or different way were approaching it?


Want to have a chat?


If you think you might be doing some activity that could qualify for R&D Tax Relief, book in a quick call with us, it only takes about 15 minutes to determine whether or not you could be claiming. It’s a bit of a no brainer. Book here to speak to our specialist.


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