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The Problem

An established electrical installation company develops bespoke electrical control systems for its clients. The requirement of the systems to be tailored to each client, means that significant amounts of time and expenditure is spent creating prototype systems and overcoming technological uncertainty.

The directors of the company were eager to maximise the research and development relief available under the Small or Medium Sized Enterprise (SME) Scheme.

The Solution

We analysed the company’s projects and consulted with the client to identify where technological uncertainties were overcome, and where advancements were made in their field. The costs were then reviewed against Government guidelines, and amounts eligible for relief were calculated and compiled into a report.

We consulted with the directors to determine whether reliefs should be carried forward as an enhanced loss, or as a payable tax credit. Once a decision was reached, a full research and development claim was prepared, including details of the relevant projects and a breakdown of the expenditure.

The claim was provided to the client and their accountants with details of the appropriate entries to make on the companies’ corporation tax return.

The Result

The client claimed relief of over £95,000, reducing their corporation tax bill to nil, and providing a refundable tax credit of £3,500.

The continued investment in research and development activities meant that we were able to assist the company in making a similar claim in the following year as well.