Our client manufactures plastics extruded and injection moulded products for the building industry.
Their recently appointed and dynamic Finance Director wondered if several of the trading divisions of one of the group companies had been missing out on making the most of this valuable relief and whether the mechanics of the then recently launched R&D Expenditure Credit scheme would apply to realise cash and or tax savings.
How we helped
Our expert held initial discussions with the FD and tax advisers via a telephone call to gain an understanding of the structure of the business, the accounting and tax profile of the company including its trading divisions. She also looked at whether the trades were streamed or aggregated and gained a headline understanding of the type of project work they had been involved in.
A series of more detailed meetings were held with divisional heads and supporting development staff to collect details of the project work undertaken and identify qualifying projects. Costing practices of the divisions was also discussed to identify qualifying expenditure relating to the projects and find out how this information was captured by internal accounting practices – consideration of extrapolation/apportionment methodologies.
She then drafted full supporting claims documentation for two accounting periods as a single document to bring the company up to date – detailed technical write ups across divisions, detailed qualifying expenditure appendices produced for each division, calculation of the R&D Expenditure Credit and the associated corporation tax savings.
This particular company has a Customer Compliance Manager at HMRC owing to its size and so the claim document was passed directly to her. The CCM came back to the group FD 10 months later having asked for it to be reviewed by an R&D specialist within HMRC’s R&D team – the feed back was “We have no specific comments on the R&D claim” which is a good result as it demonstrates our expert’s approach in pulling togehter content for the delivery of information meets with HMRC approval thereby giving them what they needed to be comfortable with a claim.
The benefits
Our approach is to be efficient and focused in the collation of technical and cost information required for an R&D claim – through talking to the right people in the business.
Our expert brought the company up to date quickly – the claim was prepared within a 4 month time frame.
Significant tax savings were achieved through thorough identification of projects and associated costs, resulting in circa £100-£125k of corporation tax savings each year.
This company has gone on to make successive R&D claims for its ongoing development work and has started to put systems in place to better capture qualifying expenditure for potentially qualifying projects as they arise.
The benefits for this comapny were significant and it’s worth noting that though they are a large company they had not previously explored potential to claim as they wrongfully believed it to be too time consuming and that the benefits would be minimal.
Our experienced R&D team are always happy to have an initial exploratory conversation to asses whether your company may be able to make a successful claim. Get in touch today or read more on our website.
