The UK can lay claim to being the premier global hub for several industries, and motorsport is most certainly one of them. The UK hub is called Motorsport Valley – home to seven of the world’s ten Formula 1 teams. It is spread over an area within 80 miles from the Silverstone racetrack.
The stats behind Motorsport Valley speak for themselves, and show the importance of this tech cluster globally, and to the UK economy. It is made up of 4,300 businesses employing 41,000 staff, including 25,000 highly skilled engineers. They turnover £9 billion of worldwide sales with 87% of UK motorsport businesses exporting.
R&D in Motorsport Valley
And these businesses do R&D. Lots of it. In fact, UK motorsport companies plough 30% of turnover into R&D. This is almost 10 times as much as road-car manufacturers. The government champions Motorsport Valley as a shining light of British innovation, a model for public and private sector cooperation, and a tech cluster that can provide solutions for every sector. They support the companies within it as they do with other innovative firms.
R&D tax credits for Motorsport Valley
A specific type of government support that is available to tech and engineering companies – like those in Motorsport Valley – is the R&D tax credit. This incentive rewards companies which take a risk in developing innovative products, processes or services.
It can be worth up to £33,000 for every £100,000 spent on qualifying R&D. So identifying all the activity that can be claimed for can give motorsport companies a real advantage in the race for the next breakthrough technology.
Typical R&D examples of R&D in motorsport
Given the high-quality and precision that is required to make a difference in motorsport, a huge array of activity is likely to qualify for R&D tax credits. Typical examples include:
- Developing and applying new materials that are light-weight and strong.
- Creating brand new technologies like, for example, semi-automatic gearboxes and energy recovery systems once were.
- Using technology to make processes like pit-stopping more efficient.
- Experimenting with aerodynamics, grip, downforce and other factors that impact lap speed.
- Designing innovative components for vehicles as part of the supply chain.
When qualifying research and development takes place, a number of your costs can be considered when calculating the value of the benefit. These include staff costs, materials and some utility costs, such as electricity and water.
Optimising R&D tax credits for F1 and Motorsport Valley
ForrestBrown has one of the largest teams of chartered tax advisers in the UK specialising in R&D tax credits. Our deep understanding of the government’s guidelines and our technical expertise mean we are well-placed to optimise your R&D tax credit claim. We identify qualifying activity that other advisers miss. And we back up the submission with robust evidence and a level of quality assurance that ensures you don’t over-claim.
How F1 technology breaks out from motorsport
You can’t beat the buzz of race day at Silverstone or the other race circuits around the world. But if you are interested in technology or cars, you can’t help but take note of how F1 tech has evolved to become used cars we see and drive on the road today. Let’s take a whirlwind tour of some of the biggest technologies to come out of F1 and onto the high street.
F1 materials in road cars
If you are a keen cyclist, you’ll know that carbon fibre is one of the hottest materials around. Extremely stiff and light, it is an engineering material of choice if you can cope with the price tag.
It was first used in F1 by McLaren who surprisingly turned to it as a material in 1981 to construct the monocoque cabin for their MP4/1 car. Once a triumph of British innovation, carbon fibre had fallen out of fashion after it had performed poorly during tests in the aerospace industry.
So undesirable was the material, that the other F1 teams raised eyebrows when McLaren started working with it. But all this was to change after a dramatic crash at the Monza Grand Prix. McLaren driver John Watson was involved in a horrific accident that left TV viewers fearing him dead. However, the carbon fibre cabin held strong and he emerged unhurt – something that is unlikely to have happened in an aluminium cabin.
Carbon fibre takes off in F1
The car went on to win the British Grand Prix that year. And soon the other F1 teams were scrambling to catch up. Despite the clear benefits, carbon fibre has been slow to work its way into the mainstream automotive sector.
Since the 90s ultra high-end cars have featured the material. But it is expensive, and has traditionally been prone to supply issues that have meant mass-market car makers have been reluctant to make their production lines dependent on it.
As greater emphasis is put on the green movement, there is more motivation to use carbon fibre to make cars lighter – lighter cars improve fuel economy. BMW have introduced carbon core technology into the chassis of their 2016 7-series for example.
One UK carbon fibre specialist company is Reverie, based in Essex. Composite experts, they manufacture and repair carbon fibre and have supplied F1 teams over the years.
The coming of electronic engine management
Arguably the most revolutionary F1 car in history was the 1993 Williams FW15C. They built upon the introduction of active suspension which had been utilised to great effect the year before. Williams introduced an advanced electronic engine management system that controlled active suspension, anti-lock brakes and traction control. This was cutting-edge at the time and the car had to be plugged into three laptops before it could be started. The complete package gave Williams a huge advantage.
The governing body promptly banned this driver aid package, fearing it would make the competition too artificial. But the technology of electronic engine management is well and truly embedded in our cars of today. Although thankfully, we don’t have to plug our vehicles into any laptops to get them going.
Ilmore Engineering are a Motorsport Valley company with a strong heritage in both motor racing and the wider automotive sectors. Having worked on F1 and Indy500 projects they have a deep understanding of engine electronics including hardware and software, wiring looms and ECU development.
They help the world’s leading passenger car producers. Among other services, they use their expertise to help companies understand how their engines react to hardware and software changes during development. This helps car manufacturers optimise performance and reliability of their engines.
Hybrid technology in F1 and beyond
One of the biggest trends in Formula 1 has been the move to smaller engines and hybrid technology. In 2014, 1.6 litre Formula 1 powertrains were introduced. They were one-third more economical and one-third smaller than their 2.4 litre predecessors of 2013 – yet had the same power.
Smaller engines aided by turbos are becoming prevalent among the mass car manufacturers to comply with tough regulations to control pollution.
One of the ways these more economical F1 cars retain their power output is through hybrid technology. Unlike the weighty battery systems of hybrid cars we have been used to on the road, these mechanical systems use a flywheel to recover and store kinetic energy, and feed it back to the engine. Developed by the Williams F1 team in 2008 the Kinetic Energy Recovery System (KERS) has become a mainstay in Formula 1 and is now starting to be seen beyond the race track.
The rights to the KERS technology was acquired by GKN Driveline, resident at Motorsport Valley and part of the global GKN group. As tier one suppliers in the motor industry they are rolling out this technology in cars we see on the road through an eAxle.
Created for the Porsche 918 Spyder plug-in hybrid supercar, the eAxle has been developed further to be appropriate for compact family cars such as the BMW 2 Series Active Tourer 225xe. For this they created a unit weighing just 20.2kg and only a little bigger than a shoebox. It is 96% efficient and provides 64kW of power. This breakthrough technology allows automakers to make plug-in hybrids workable for their range of compact cars.
And it is not just cars that are benefitting from this clever hybrid technology. In 2014, a production deal was done to equip 500 London buses with a KERS system. That should make The Big Smoke somewhat less smoky.
Semi-automatic gear boxes
This one’s for the boy racers. Flappy paddle gears and the semi-automatic gearbox! These were introduced by the F1 Ferrari team in 1989. The benefit of these is that they give the response of a manual gear box with much of the convenience of an automatic – no clutch, no gearstick. Just flappy paddles behind the steering wheel that you tap to shift up or shift down.
Ferrari had teething problems in that first 1989 season, but the benefits were there to see and by the mid-90s, all F1 teams used the technology. The 1997 Ferrari Berlinetta was the first road car to be fitted with those flappy paddles. And now, while it would be going too far to say they were mainstream, they are option on a wide range of cars.
F1 technical skills going off-road
We are not talking about all-terrain here. F1 expertise is so highly regarded that it crosses into other sectors that have very little to do with cars.
F1 expertise in hospitals
The Williams F1 team were taken aback when they were approached by University Hospital Wales in Cardiff. The hospital was looking to improve their performance on resuscitating new-born babies. They recognised similarities in how a team of medics work to those in a pit-stop. They were so impressed that the Williams team could change four wheels on an F1 car in just two seconds, that they wanted them to consult on their own processes.
Williams obliged and three main areas of improvement were identified. Better equipping the trolley with easily accessible tools, improving the way the medical team navigates space, and improving team dynamics so that everyone’s role was clearly defined.
NHS using pit-stop process in new-born baby resuscitation
This is not an isolated case. The Ferrari team has advised Great Ormond Street hospital on how to manage heart surgery procedures, and how to improve the hand-off procedure when a child is transferred from operating to intensive care.
Are you innovating in Motorsport Valley?
It’s clear that whether directly by the F1 teams, or through the long F1 supply chain, there is constant science and technology-based innovation taking place in Motorsport Valley. This not only helps F1 and other motorsports evolve – making them safer, greener, and faster, but spills over into the everyday world we live in.
Our whistle-stop tour has seen how they have helped our cars become more economical through better materials and technology. How hospital staff are working more efficiently. And how advanced engine management computers become the norm in road vehicles today, even if they were banned in F1.
If you are carrying out research and development for the Formula 1 industry or are based in Motorsport Valley, you should check your R&D tax credit position.
Are you claiming R&D tax credits at all? If there is risk and uncertainty in what you do, you are using science or technology, and are trying to make an appreciable advance in your products, processes or services you probably should be. Talk to ForrestBrown to find out more.
Or are you already claiming R&D tax credits? Unless you are using true experts, there is lots of scope for getting it wrong – under-claiming and missing out on money that you are entitled to, or over-claiming and exposing yourself to the risk of action by HMRC.
ForrestBrown has a champion team of chartered tax advisers. In the last two years, we have picked up ‘best independent consultancy firm’ and ‘rising star’ awards at the Taxation Awards – The F1 Championship of the UK tax world. It’s all down to our innovative culture, robust R&D tax credit process and strong desire to do the best for our clients. Let us see if we can help you too. Call 0117 926 9022.