Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
How should founders approach R&D tax relief claims given recent HMRC enforcement and stricter eligibility rules?
HMRC has significantly tightened R&D tax relief scrutiny in recent years and is actively auditing claims, particularly targeting smaller businesses. Members report a shift from a generous, post-claim-payment model to stricter pre-payment validation. **Key risks and changes:** - HMRC's enforcement mandate has intensified; the agency now requests detailed information and challenges claims more frequently, sometimes with generic responses that don't adequately address detailed counterarguments - Claims are essentially self-assessed (HMRC pays first, audits later), making them vulnerable to retrospective challenge - Eligibility rules have become "considerably less lenient" — what qualified in previous years may not now - Smaller businesses face disproportionate audit risk, while larger firms with dedicated R&D departments and professional advisors (PWC, KPMG, Deloitte) face less scrutiny - Claims on operational staff who are not 100% R&D-focused attract particular scrutiny **Practical recommendations:** - Work with a specialist R&D tax relief advisor; members report claims can be substantially optimised (one founder's £10k expectation was increased to £45k) at competitive rates - Be conservative with claim scope; one founder reduced anticipated claims significantly in anticipation of stricter scrutiny - Ensure robust documentation of qualifying work to withstand HMRC challenge **Caveat:** Members emphasise caution is now warranted. One founder is in active dispute with HMRC over a 2021 claim (£33k) that was challenged mid-year with limited explanation.
What should you do if a distributor or co-packer suddenly shuts down or goes out of business?
This is a real risk in the drinks industry. Members who experienced unexpected closures (such as the Brittains Beverage situation) report it can be a major disruption to recover inventory. **What happened in practice:** - Members caught in the Brittains closure faced an "absolute nightmare" trying to recover liquid, boxes, capsules and other materials held at the facility - Recovery required "determination" and direct effort to retrieve goods; it was not straightforward or automatic - Some suppliers may have a significant proportion of bulk inventory stored at a single facility, creating concentration risk **Preventative steps members suggest:** - Before committing inventory or materials to a distributor or co-packer, understand their operational footprint and consolidation risks (e.g. whether they operate multiple sites that might be rationalised) - Consider requesting vetting help from the DBT (Drinks Business Trust), which maintains an accredited buyer list as a baseline check - Build relationships directly with your co-packer/distributor contacts so you have a personal channel to escalate if warning signs emerge **Caveats:** - Even with warning, recovery of goods is time-consuming and resource-intensive; there is no automatic process - Bulk inventory held at a single location (especially if it's a consolidation play) puts you at higher risk - No foolproof protection exists—the best approach is due diligence upfront and maintaining alternative supply chain routes where possible.