Recuperating £70,000 in R&D Tax Credits for Freedom Brewery
Published 24 March 2021
How do you go from having zero knowledge of research and development tax relief to recovering circa £70,000 in R&D tax credits?
With a little help from Recoup, as Freedom Brewery recently discovered.
In our interview with Matthew Willson, Managing Director of Freedom Brewery, we reveal how a simple R&D tax claim has boosted the drink sector business for years to come.
Who is Freedom Brewery?
In 2020, Freedom Brewery celebrated its 25th year as an innovator in the beer brewing industry.
The company started with a simple purpose: to make better quality beer. It views brewing as a science that requires expert knowledge, care and attention – the antidote to mass-produced beer where the emphasis is on speed and profit rather than the quality of the product itself. Because of this, you could absolutely call it an R&D brewery!
Matthew joined the company four years ago after it was acquired by a private equity firm. Since then, he’s been driving the brand, exploring new markets and supercharging sales through an increased emphasis on innovation.
“I paid no attention to R&D”
“My knowledge of R&D was next to nothing before getting in touch with Recoup,” explained Matthew.
“We would get regular calls from agencies but I always just dismissed them as cold calls. Because I didn’t think R&D was relevant. And even if it was, I felt that it was too complicated and clunky to be worth pursuing. Plus, I wanted to live in the moment. We were trying to drive the business forward, so why worry about what we did in the past?”
This all changed when the pandemic hit last year. “94% of the business was selling to pubs,” continued Matthew. “We had to pivot; find a way to reach consumers directly. It was during this time that I started thinking about how much we rely on technology and how agile the business had become. Which brought me back to R&D.
“I spoke to a friend who had done loads of research and development work in the past. We chatted it through and that’s when I realised how much we were missing out.”
“Shortly after talking to my friend, I got in touch with Recoup,” said Matthew. “Our first conversation was eye-opening. Recoup helped me see how we are constantly innovating in the way we produce beer and new products, and how we should be seeing ourselves as an R&D brewery.
“Before, I always thought that R&D was about having scientists in a lab. But it’s not like that at all. The truth is that brewing is a science in itself. As brewers, we are scientists.”
Matthew is right. Freedom Brewery is constantly innovating, especially when it comes to making better quality beer with a longer, fresher shelf-life. The company is continuously investing time and effort into testing its products, trying different ingredients and new equipment to develop better drinking experiences. In essence, it represents the pinnacle of R&D brewing.
This is distinct to the business. For example, in big commercial brewers, they inject CO2 at the end of the beer-making process (which is what gives beer bubbles) for more efficient brewing, arguably compromising on taste. Whereas Freedom Brewery naturally carbonates its beer, seeking the optimum point of maturation to deliver premium products. Such work requires plenty of experimentation, all of which is eligible for R&D tax relief.
“A simple and enlightening process”
For a long time, Matthew believed that putting in an R&D claim would be a complex and time-consuming process. Recoup showed him how the opposite is true.
“During our first meeting, Recoup asked me some simple questions that were relevant to the business. It felt really simplistic because of the way the questions were structured to me.
“They listened to me and then honed in on what activities qualified for R&D. They knew exactly how to unpick our processes and communicate why they were relevant in the R&D world.
“It was an incredibly simple and enlightening process. I came away from that single conversation buzzing. I could envision how R&D would impact our business and open a lot of doors for us.”
£70,000 in less than two months
The claim was put in just after Christmas in 2020, and Freedom Brewery received funds from HMRC by early February in 2021.
“It was much faster than we were expecting. And because I had no expectations about how much we’d received, I was shocked to say the least when the results of our claim came to circa £70,000.”
How will the money be used?
“For starters, we’ve reinvested our funds from the claim into the processes around how we pack beer. We’ll be doing another claim for 2020 as it was a massive year for innovation due to the amount of pivoting we’ve done because of COVID-19.
“Thinking further ahead, we plan to use R&D as a strategy for growth to further our goal of being a pure R&D brewery. It’s given us confidence as a business to keep on striving for a better quality product. This is thanks to Recoup. The method they used to simplify R&D was integral to us getting here.”
Think you might qualify for R&D tax relief? Use our free Eligibility Checker to find out.
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