R&D Tax Credit Specialists in Birmingham
Written and reviewed by the R&D Tax Accountants editorial team. Last reviewed 8 August 2026.
The West Midlands economy is built on advanced manufacturing and engineering, the automotive supply chain, professional and legal services and logistics, running from Colmore Row and the Jewellery Quarter through Digbeth and out across the Black Country and Solihull. It is one of the strongest genuine R&D bases in the country and a significant share of the qualifying work goes unclaimed.
The reason is rarely eligibility. It is that engineering companies describe their work as engineering rather than as research, and that two specific rules cut across supply chain claims.
Automotive Supply Chain R&D in the West Midlands
Tier two and tier three suppliers across Coventry, Wolverhampton, Walsall and Dudley routinely develop components and processes to specifications that did not previously exist, and often without knowing at the outset whether the specification was achievable with the materials and tooling available. That is the statutory test being met in the ordinary course of business.
The claims tend to be well evidenced almost by accident, because this sector documents test regimes, first-article inspection and failure analysis as a matter of course. Where a claim is weak it is usually the narrative rather than the records: the uncertainty is described as a customer requirement rather than as something a competent professional could not readily resolve.
Who Claims When an OEM Sets the Brief
This is the rule that has changed the position most for West Midlands suppliers. For accounting periods beginning on or after 1 April 2024, the right to claim contracted-out R&D belongs to the company that decided on the R&D and planned it. Where an OEM issues a specification and contemplates that development work will be required to meet it, the claim may sit with the OEM rather than with the supplier that did the work.
That is not automatic, and it turns on the facts of the arrangement rather than on the label in the purchase order. Suppliers who solved the problem themselves, on their own initiative, with the customer buying an outcome rather than directing the development, may still be the claimant. The detail is on the merged R&D scheme page, and it is the first thing to establish on a supply chain claim for a post-April 2024 period.
Process Development Versus Production
The second rule that bites in manufacturing is the exclusion of production and distribution costs. The boundary matters: development trials, prototypes and the work of establishing whether a process can hold a tolerance are within the relief, and the production run that follows is not.
Companies get this wrong in both directions. Some claim the whole line and invite a correction. Others exclude everything that happened on production equipment, including genuine trials, and understate the claim. Consumables actually consumed in trials qualify, which is worth separating out at the time rather than reconstructing later. What qualifies is set out on the R&D tax credits guide. Greater Birmingham Chambers of Commerce and the West Midlands Growth Company are the usual local support routes, and we work with companies across Solihull, Wolverhampton, Coventry, Walsall and Dudley.