Research & Development Tax Credits – Case Studies

RESEARCH & DEVELOPMENT TAX CREDITS – CASE STUDIES

EXAMPLE 1


A leading brewer of fine ales which had seen rapid growth and expansion instructed PBS to investigate their position in regards to eligibility for an R&D claim.

 

R&D was identified within the project activity associated with the development of a bespoke water treatment facility. There was R&D within the in-depth analysis undertaken of the local environment to determine a safe place for water distribution, and also within the testing of the water to ensure PH levels and any chemical treatment had been effective and safe.

 

R&D was also identified through advanced recipe formulation, where a project was undertaken with the intention to achieve a distinct flavour – this enabled an advance in product knowledge for a number of staff members.

 

Quick stats- 

Annual Turnover (2013) – £3,000,000

R&D Additional Costs (2013) – £33,615

Client Benefit (2013) – £6,723

 

Annual Turnover (2014) – £3,000,000

R&D Additional Costs (2014) – £54,467.50

Client Benefit (2014) -£17,616.60

 

 

Both the above claims submitted in succession due to R&D legislation allowing us to go back two open tax years = £24,399.60 Client Benefit, further annual benefits to follow. The client benefit is expected to rise again for the 2015 claim.

EXAMPLE 2


PBS investigated the R&D tax relief position of an innovative brewery. R&D activity was found to be present via the development of a number of new projects which brought a variation in product lines and staff knowledge to the business.


One such project included the installation of food grade oxygen to allow for the control of oxygen levels with their beer, the project was largely ‘trial and error’ and was undertaken as a risk to the business owners. Other projects included the development of recipes to meet consumer demand and the development of bespoke equipment to prepare for a new ‘keg’ based production line.

 

 

Quick stats- 

Annual Turnover (2014) – £5,000,000

R&D Additional Costs (2014) – £139,728.01

Client Benefit (2014) -£30,858.97

EXAMPLE 3


We do have a recent example of a food processing company also which I thought was comparable. Where the R&D was identified was within elements such as heat testing, ingredient molecular reaction testing, flavour development time-scaling and oxygen exposure time-scaling.

 

Any bespoke computerised systems could potentially also qualify, in this instance a bespoke product ‘picking’ application formed a substantial part of the claim value.

 

Quick stats- 

Annual Turnover (2012) – £500,000 (approx..)

R&D Additional Costs (2012) – £76,899.27

Client Benefit (2012) – £16,403.20

 

Annual Turnover (2013) – £500,000 (approx..)

R&D Additional Costs (2013) – £84,814.87

Client Benefit (2013) – £20,582.16

 

 

Both the above claims submitted in succession due to R&D legislation allowing us to go back two open tax years = £36,985.36 Client Benefit, further annual benefits to follow.

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