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In a recent article in The Sunday Times, Shaun Pulfrey a hair stylist, successful businessman and contestant on ‘Dragons Den’ shared his success story. After failing to impress the ‘Dragons’, Pulfrey continued to back his patented anti-tangle hair brush, ‘Tangle Teezer’. Although he was strongly advised to the contrary, Pulfrey chose to have the product manufactured in the UK instead of China, despite the production cost being almost double.

This was due in part, he said, to his concern that something would be lost in translation oversees. His investment paid off, opening up exporting opportunities abroad; the ‘Tangle Teezer’ is currently sold in 110 countries, including China, where British-made products are in high demand and sell for a greater price.

In the many years before making his first crucial sale in 2007 at a London trade fair, Pulfrey is reported to have spent £90,000 on research and development. This a great example of R&D costs that would be likely to qualify for a tax refund under current government incentives. If Pulfrey filed a claim for tax relief against these costs in time, he could have received around £225,000 of this back. This can make all the difference to an SME (small or medium enterprise), and we predict that as manufacturing continues to return to the UK, more and more businesses will take advantage of these tax incentives. reported that ‘Research by the Institution of Engineering and Technology shows that about 40% of its members are contemplating bringing back production from China in some way or starting to produce in the UK in the first place.’

Aside from the niche appeal of British products in the foreign market, what is driving manufacturing back to the UK? Breffo, one of Britain’s leading manufacturers of consumer electronics, who has been manufacturing all of its products in Devon for a number of years now, explained to the Telegraph their reasons for manufacturing in the UK. They highlighted some of key issues involved, which included more obvious problems, such as the language barrier and logistics, but also the current trend of higher labour and energy costs affecting China and the readily available supply of skilled workers in Britain. There is also a serious problem enforcing intellectual property rights (IP) in China: "We have heard of nightmare stories where copycat products are outselling genuine products all sold from the master manufacturers factory in China. Manufacturing in the UK, we don’t have to deal with this issue."

We advise that before UK manufacturers pack their suitcases, they should consider the problems faced by those who produce offshore, such as intellectual property theft. UK businesses can benefit from setting up production closer to home, especially with current tax relief incentives which could save thousands on research and development.

Get credit for your business innovation with research and development tax credits claim assistance from RIFT. Find out more about R&D tax credits for manufacturing, deep dive into the world of business innovation with our insights, or contact RIFT R&D today to find out how we can maximise your benefits.