Helping Neon Creations Recover £30,000 in R&D Tax Relief
Published 8 February 2021
We recently helped Neon Creations claim £30,000 in research and development tax relief.
This is a perfect example of how businesses that don’t fit into the typical R&D box can claim a substantial amount of tax relief on their innovative activities.
Co-founder Catherine Spink reveals her experience working with Recoup. From her perspective, learn our process and the results we gain for our clients in niche industries.
Who is Neon Creations?
With over seventy years combined experience in the neon sign industry, Neon Creations are masters of their craft.
For almost sixteen years, the family-run company has been designing bespoke neon signs, lights and art, all of which are manufactured in their own workshops.
The company was set up by Catherine and her husband, Tony. It was their shared love of neon art that brought the business to fruition. Thanks to the skilled team built over the past decade, Neon Creations has flourished into a highly successful business that works with clients across a wide number of industries.
Renewing Catherine’s faith in R&D tax support
Before connecting with Recoup, Catherine was approached by another R&D tax consultancy at a local trade show.
The consultancy was keen to help Neon Creations put in a claim for their research and development activities. Catherine agreed to get the process started, but further down the road, things went awry.
“They told us they didn’t think they could process a claim for us after all. I was really frustrated. We’d spent a lot of time pulling information together for them.”
A few years later, Recoup was recommended to Catherine through a shared contact. She was hesitant to work with us due to her bad past experience, but in the end, she decided to move forward with a claim.
It was up to the Recoup team to change Catherine’s outlook on the potential of R&D tax relief.
Working with Recoup
James Turley – Business Development Manager at Recoup – assisted Neon Creations with their R&D tax claim. The process began during lockdown in March 2020, so Catherine had a telephone call rather than a physical meeting with James.
Catherine explains how her input was minimal: “James was very clear about what I needed to do. Which wasn’t a lot! It was just a case of getting some background information together about our past projects and the costs incurred.
“From there, I had a quick but thorough call with one of Recoup’s chartered tax advisors. After that, I didn’t need to do anything. If I had any questions or wanted to follow up on things, James always responded promptly.”
Reaping an ROI on exciting innovations
Catherine was concerned that when Recoup dug a bit deeper into the business, they’d come up with the same answer as the previous R&D tax consultancy: “Your activities don’t qualify for R&D tax relief.”
She needn’t have worried. We discovered that there were plenty of activities in which the investment could be recouped through an R&D claim.
One significant factor is the way Neon Creations are continually reinventing how the hundred-year-old industry is perceived. Most of the time, neon technology is used to build signs. But Tony and Catherine were keen to branch out into neon art.
For example, they were recently approached by Capcom, a Japanese video game developer and publisher. Capcom has created a number of multi-million-selling game franchises, including Resident Evil and Devil May Cry.
Capcom wanted Neon Creations to come up with designs for its Devil May Cry 5 merchandise. To do so, Tony spent a lot of time exploring different concepts, using innovative methods to bring his ideas to life.
t was the trial and error of coming up with an idea, designing it on software, creating the product and seeing if it worked that pushed these activities into R&D territory.
Moreover, Tony designed and created neon art for an exhibition at a Manchester gallery in November 2017. He also submitted creative pieces for the Greater Manchester Chamber of Commerce Arts Prize in 2019. In the end, these types of projects were all eligible for R&D tax relief.
A claim worth £30,000
By the end of 2020, Recoup had helped Neon Creations claim £30,000 in R&D tax relief for the previous two financial years.
“It was much more than I was expecting. To go from having been told your business isn’t eligible to recovering £30,000 was pretty extraordinary” says Catherine.
Neon Creations has since used the money to help the business stay afloat during the pandemic. And while their innovative activities are on hold until things settle down, Catherine has every intention of using Recoup again in the future.
“An easy, straightforward experience”
The thing Catherine liked most about working with Recoup was how straightforward it was.
“There was no massive amount of documentation required to kickstart the claim,” she explains. “Everything that we needed was easily accessible, and all our questions about R&D tax in general were answered with ease.”
“The money was a huge bonus too,” she adds. “We were never expecting so much from our experiments with neon art. It’s made us feel more confident about pursuing innovative processes in the future.”
Does your business qualify for R&D Tax Relief?
Like Neon Creations, if your business has been undertaking innovative activities to overcome challenges and further your industry, you’ll likely qualify for R&D tax relief.
To get a concrete answer, use our Eligibility Checker or call us directly on 0800 3277514.
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