Five clients show how claiming R&D Tax Relief has hugely benefitted their businesses; from enabling key additional resource which has facilitated growth, to employing crucial marketing campaigns for a start-up.
The scheme, which encourages scientific or technological innovation, allows companies carrying out qualifying R&D activities to claim an additional Corporation Tax deduction for certain expenditure used to create or adapt innovative products or solutions. The monetary value of the benefit achieved is recorded, but the tangible outcome for our clients receiving such an advantage is rarely explored.
Benefits have been received in the form of a cash repayment or from a reduced tax liability which has freed up funds to be invested back into keys areas of their company.
We asked five of our clients what they have been able to achieve as a result of us completing successful R&D claims on their behalf.
Just A Splash Ltd – Pia Varma (Food)
As a young company developing blended culinary alcohol products (creating a new category in the food industry), the conversion of losses to cash in this case enabled them to begin investing in a strong marketing strategy to push their products to market, be successful in winning a number of major contracts, as well as reinvesting in new product development to maintain their competitive edge. Ordinarily, without such a claim, the losses would be carried forward until the business is profitable which in any new company, may or may not be achievable without the investment in an established marketing campaign.
Vindex – Clive Talbot (Security)
As a dynamic, market leading systems integrator delivering Intelligent Business Protection solutions to their customers, staying ahead of competition is absolutely critical for this company. A two-year claim for the company resulted in a significant saving which has enabled them to reinvest. The cash injection has enabled the company to take on two key Sales Team employees, which has assisted them in growing the business further. Naturally, the funding also helps them to continue their focus on pushing innovation forward both as a business and in their industry as a whole.
101 Engineering Ltd – David Williams (Engineering)
101 Engineering are a company that specialises in high quality manufacturing of cable assemblies, preparation and terminals. Having acted for them and claiming R&D tax relief for a number of years, it has been a great benefit to their company. They have been able to invest the money from the reduced Corporation Tax into new machinery and equipment which has helped them maintain high quality products, one of their key strengths. Further investment in new test equipment has also helped to increase their testing capability and productivity.
Lovely Drinks – Rick Freeman (Drink)
Lovely Drinks are an award-winning producer of artisan sodas and juices, who seek out the very best ingredients and strive to produce products that steer well clear of preservatives and artificial sweeteners. Their new product and software development work has enabled them to utilise R&D tax relief, which in turn has enabled them to expand into new markets and develop new product ranges such as their Ice Lollies and Organic range. The R&D savings are instrumental in allowing such new development to take place.
Eurolink Connect Ltd – Claire Maddox (IT & Software)
Since we introduced Eurolink to the R&D tax relief scheme, the business has seen high business growth in particular sectors where they have been able to focus resources in developing unique solutions. As a result, they have won new contracts and been able to employ additional staff to support these, plus they are now making new introductions as they further develop solutions for new customers.
These examples are evidence that making R&D claims not only benefits a company financially, but strongly facilitates organic growth, key additional resource, investments in critical areas and enabling new start-ups to employ crucial marketing campaigns.
You could be missing out on untapped potential, and there is nothing to lose from a free no-obligation chat. If you would like to understand if your company qualifies, please do not hesitate to get in touch. You could be benefiting from significant savings to help your business grow.
James Geary is Corporate Tax Partner and is happy to help – for more information contact firstname.lastname@example.org or call 01242 776000.