Making tax ‘fashionable’: Wearable & Fashion Tech

Blog by Hannah Sparrow

From smart eyewear, smart watches, to smart footwear and smart clothing… this is the era of wearable and fashion tech. Hannah Sparrow discusses how the government’s R&D tax credit incentive is rewarding innovators.

The tech craze has been growing worldwide for decades and fashion is finally joining the fray. Fashion related industries are seeing rises in innovation and collaboration within the tech space, dominated by software development.

We are already seeing the first results of these collaborations; there are around 10 million wearable devices in use in the UK alone, and this number is expected to triple over the next four years to almost 33 million.

Photo credit: Luxury brand - KHAMAMA ‘Haute Art de Papillon’ iPhone covers, transforming a regular device into an exquisite fashion accessory.   

Photo credit: Luxury brand - KHAMAMA ‘Haute Art de Papillon’ iPhone covers, transforming a regular device into an exquisite fashion accessory.   

All evidence points to a successful future for tech-focused fashion and retail, and from a tax point of view it can be very rewarding too. In the past this has mistakenly not been considered as an area of research and development, but in reality, the tech-based fashion sector is very relevant to the UK R&D tax credit incentive.

The rewards from tech-focused innovation are not limited to the retail side of fashion either. There are amazing things happening in the development of new fabrics and the construction of garments, driven by the use and incorporation of technology. If your company is developing or modifying products, processes or services in textiles, fabrics or clothing, you could recoup up to 33p for every £1 spent on your innovation. More money equals more innovation and as someone who has worked in the fashion industry I couldn’t be happier!

Photo credit: Sailing brand - MUSTO Fabric technology features include fast-drying and super lightweight UV and impact protection, delivering superior comfort and agility to active sailors.

Photo credit: Sailing brand - MUSTO Fabric technology features include fast-drying and super lightweight UV and impact protection, delivering superior comfort and agility to active sailors.

Companies in the UK are rewarded by the government through the R&D tax credit incentive. This recognises the wider benefits to the economy of companies making technological advances, and provides a financial benefit to those claiming.

Looking at experience in this sector

The development of a lightweight, windproof garment which would be suitable for trail runners and ultra-distance athletes. Often when training and competing, trail runners will carry only a bum bag style pack or a very lightweight ‘vest’ pack, with a maximum capacity of a few litres. Within this they need to be able to carry all the kit they require for a full day in the mountains.

The functionality of windproof garments is highly desirable because they are more breathable than waterproof layers, allowing the micro-climate between the wearer and garment to be regulated more effectively. This makes them perfect for stop-start high aerobic activity; the garments protect from wind chill but reduce the risk of overheating and this client sought to develop and produce the lightest weight windproof full-zip jacket on the market.

The company experienced numerous design challenges on this development. The developers attempted to minimise the trim componentry on the garment to the absolute minimum, without compromising the functionality of the garment. For example, making an over the head ‘smock’ style garment would have achieved a lighter weight overall but the functionality is not ideal for an ultra-distance runner when rapid on/off of the garment is required. The company had to analyse every element of the garment’s composition to try and reduce weight down, to small design aspects such as the care label and the logo transfers.

Also successful in qualifying for R&D tax relief was the creation of a wearable location device. This was designed with the elderly in mind and, specifically, Alzheimer sufferers. The wearable device would be able to reliably locate the wearer, both indoors and outdoors with additional useful functions incorporated.

The device is a more personal and advanced version of traditional panic alarms that are mainly used in cases of trips or falls. The device has a number of unique features developed by Abbey Tax’s client. This includes:

  • Remote monitoring of the device by friends and family using cloud based software. Including GPS location and movements to determine where an individual is and if they are in motion (a standalone GPS location in a park is not helpful if the person is at risk of falling. The data needs to show whether the person has stopped moving).

  • A push facility for approved remote users to send alerts and reminders to the user. This may be a reminder to take medication or something similar.

  • Alerts from the device if the user goes out of a certain defined area.

If you feel your company may be undertaking R&D and facilitating an advance of science and technology within its field, it could qualify for R&D tax credits. As this article has demonstrated, there are many different ways this could be applicable to fashion and wearable tech.

 

Get in touch with us via email at hello@womenofwearables.com if you would like us to introduce you to Hannah and to find out more on how to qualify for R&D tax credits!

 

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Hannah Sparrow is an award winning visual stylist with a wealth of experience in merchandising for many top brands. She has over 10 years’ experience in visual styling and merchandising, supporting both high street and luxury high end brands working all over the world: UK; Europe; UAE; and USA. Now at Abbey Tax R&D tax division, she is focused on qualifying R&D tax claims with a particular passion for this sector. With her key industry knowledge she is well equipped to qualifying any retail, fashion or wearable tech queries you might have.