Recovering £90,000 in R&D Tax Relief for a specialist projects firm
Published 12 February 2021
Like many of the business owners we talk to, the directors at a special projects firm were initially skeptical of the R&D tax relief scheme. Running a civil engineering business, it was thought, “We’re not a technology-based company so how can we qualify”?
The directors of this firm changed their minds after the first meeting with Recoup. Discover what triggered this shift in mindset, their overall experience working with us and why R&D in civil engineering is more common than you think.
A little bit about the firm?
This special projects are a civil engineering, deep drainage and specialist concrete repair company.
The company was established in 2018 and has since successfully delivered a wide range of civil engineering projects for a number of clients.
The continued growth and success is thanks to a highly-trained and multi-skilled workforce with experience working across various sectors including highways, commercial, residential, water power and local authority.
Warming up to the potential of R&D tax relief
Before connecting with Recoup, the directors of this firm believed the company wouldn’t qualify for the R&D tax scheme.
“We always assumed R&D was purely about investing in high-tech equipment and methods of working,” our client explained.
But then they got a call from a member of the Recoup’s team. “Recoup Capital was working with UK civil engineering firms”. “That got our attention.”
“Plus, we were advised that it would only take a thirty-minute call to work out if we qualify,” stated the directors. “Which made us think we don’t have anything to lose so why not try?”
Uncovering innovations
R&D in civil engineering companies is actually quite common, but it can be difficult to know what activities qualify and what don’t. Our first call with the the management team aimed to draw out the innovations they had previously thought weren’t eligible for R&D tax relief.
For example, the specialist projects firm had previously worked alongside SDS, to trial the installation of a new filter media Aqua-Xchange™ along a section of motorway filter drain system. The innovative filter media captures and retains copper and zinc, poisonous metals released through the abrasion of vehicle tyres and brake pads, these heavy metals would previously dissolve in surface water during heavy rain and have the potential to pollute local water courses. The Aqua-X-change™ system suspends these metals within the filter media and prevents pollution incidents.
Working with SDS they tackled a specific problem: finding a way to efficiently replace the existing filter media and install the new Aqua-Xchange™ system. An innovative solution to a complicated problem, this was absolutely eligible for R&D tax relief.
Also, it’s not just completed projects that can qualify. Our clients staff had worked on other projects, one of these was to develop an early warning system for expansion joint failure. The aim was to cut down maintenance checks by putting a system in place that could detect faults without human intervention.
While the firm have yet to complete the system, their time investment into research was eligible for R&D tax relief.
“Recoup opened our eyes to the massive potential of the R&D tax scheme,” explained one of the directors, Ben Dobson.
“A professional and efficient process”
After the initial call between Recoup and the firm, the next step was compiling information surrounding R&D activities to go through with one of our chartered tax advisors.
“We didn’t spend a lot of management time during that stage,” our client shared. “There was no sitting down for days on end to put things together. Recoup told us exactly what was needed and the information was easy to gather.”
After the firms’ call with the tax advisor, Recoup handled facilitate the rest of the claim. “Our input was next to nothing after those initial meetings. And if we had any questions about the process, Recoup was always there to help.”
Overall, the time the firms staff spent on the claim was no more than three hours. “It was a professional and efficient process. Our fears about it being time-consuming and complicated were unfounded,” our client said.
£90,000 in R&D tax credits
Despite how seamless the initial process had been, the director and the other directors still had doubts about the claim. “We didn’t believe HMRC was going to take us seriously,” he admitted.
You can imagine their surprise when BDB Special Projects discovered their claim amounted to £90,000. “To go from expecting nothing to recovering £90,000 was brilliant news,” our client said. “We are very happy with the results.”
Innovation on the horizon
Thanks to the success of their first claim, the firm want to keep exploring new ways of working. “Without a doubt, the incentive is there to pursue R&D in civil engineering and other areas of our business,” our client said.
He continued, “Civil engineering and construction are always looking for ways to improve and adapt, from moving towards greener solutions to improving health and safety. We want to be at the forefront of those changes.”
When asked if the firm would use Recoup again, our clients answer was “absolutely”. “I’d recommend Recoup to any business that needs help identifying innovative activities and recovering their investment.”