Over the years we’ve worked with lots of company’s who didn’t believe they could claim R&D tax relief through their own or their advisors’ misunderstanding of the scheme. We thought we would share some examples to demonstrate some these misconceptions, hopefully helping other businesses to access this valuable incentive.
1. A metal processing business who believed they wouldn’t qualify
Like many companies, this Yorkshire based metal processing business had looked into R&D tax credits and both they and their accountant didn’t believe they qualified for the scheme. This misconception was based on the fact that their end products hadn’t fundamentally changed for many years.
What, they hadn’t taken into consideration was the work they had done to improve their processes and drive efficiency. During our exploratory meeting with them, we discussed the work they did, and we were able to identify these projects eligible activity.
As result, we were able to make successful claims for the company based on the work they had done to improve their heat treatment process and their development of two new machines to increase their throughput and the quality of their finished products.
Over three years the company has received a tax benefit of £211,000.
2. A marketing agency who were advised they weren’t eligible
Our client is a small marketing agency who employs four web developers and software engineers. They were aware of R&D tax credits and had investigated it previously with both an R&D tax credit specialist and their accountant. On both occasions, they were advised that they didn’t qualify for the scheme.
Knowing that software is an area that is commonly misunderstood we knew it was worth doing an initial exploratory meeting. At the meeting, it became apparent that their previous R&D advisors’ didn’t fully understand their software and development activities.
The company had been involved in several projects which qualified for the scheme including:
- the development of their own CMS system;
- integrating new e-commerce software with legacy systems; and
- the development of a bespoke partner portal that was required to integrate with incompatible legacy sales and administration software.
Over the last two years, we have helped them to successfully claim a tax benefit of £17,550.
3. A motorsport company with no staff
This company is very different to most clients as it had no employees just volunteers, so their overheads were very different. On face value, many wouldn’t think they were eligible for R&D tax credits. But that wasn’t the case for us as we love seeking out eligible activity where others can’t see it.
The company was founded by two motorsports enthusiasts who operate the company around their employment elsewhere. The company was designed to help them and other volunteers to show off their automotive engineering talent.
The company took a commercially available supercar and developed it into a highly competitive endurance race car. They improved its performance, reliability, drivability and driver safety through developing the chassis, suspension, aerodynamics and heat management.
So far, the company has received a tax benefit of £32,300.
The TEQ Group way
As you can see from these three examples, we don’t take things on face value or necessarily accept what other professionals have said if we have a sense that you could be eligible.
We listen to our clients and hear first-hand about their activities so we can make our own independent opinion.
There are so many examples we could have used where businesses have been told they are not eligible or believe they aren’t, and we have gone on to find eligible activity and made successful claims.
The key to what we do and why we are different is that we are technical experts, not accountants., We specialise in R&D tax credits so we fully understand the ins and outs of the scheme but we also have technical knowledge that allows us to understand your business, products and processes.
If you would like a second (or first) opinion on your business’ R&D tax credit eligibility, then please get in touch for a free initial exploratory meeting on 01423 815299 or click the button below and we’ll be happy to offer some advice.
Contact TEQ Group