Business Solutions (Midlands) Ltd Help to Secure £120,000 Tax Credit Claim
Network 4 Business member, Business Solutions (Midlands) Ltd, has recently helped a client to make a successful six-figure R&D tax credit claim.
Many companies doubt their eligibility for R&D credits and therefore potentially miss out on significant cash benefits. Business Solutions’ recent client began the process with this exact mindset, only to later be awarded £120,000 in tax credits. Read on below to find out more…
R&D Tax Credits: An Overview
In 2000, the government launched an initiative, aimed at promoting research and development (R&D) in the UK. This initiative was endorsed and is regulated by the European Union and enables companies to claim back that proportion of their Corporation Tax, where monies have been spent on R&D within the business.
Many companies struggle with this concept, having a clear view that they do not perform any R&D within the company. HMRC, however, determine R&D to be “an advance in Science or Technology”, which can mean overcoming a technical uncertainty in a host of subject areas, e.g. software development, prototype design and manufacture, process innovation, changes in tooling protocols, and environmental issues, etc.
With over 20 years of experience, Networks First is one of the UK’s leading suppliers of network services for converged IT infrastructures. Networks First has established relationships and achieved accreditations with the key network manufacturers. This, along with highly qualified engineer and IT consultant teams, ensures the highest levels of service which includes lifetime support, from strategic advice, through implementation, service management and provision for future requirements. From new cloud-based technologies to cutting-edge mobility services, Networks First offer a unique and tailored offering which has enabled the company to keep ahead of the competition and build their client base to include corporates such as Cap Gemini and IBM.
For many years, Network First used a mix of stand-alone software systems written by numerous third party vendors, and Excel spreadsheets to control their internal business processes. However this type of silo-based system began to cause the company significant problems in terms of maintenance costs and general inflexibility.
As the business developed and a number of high profile multi-national companies were taken on, the senior management team realised that their internal business systems needed to be upgraded to meet the demand for growth. As a result, they began to research the market for possible ‘off the shelf’ solutions. However, after 12 months’ market research, it became evident that only piecemeal solutions were available; no single solution would have given the company what they needed. The company’s internal software developers came to the conclusion that, regardless of cost, existing packages did not meet the specific needs of the business moving forward. In short, a fully integrated solution for the IT Networks maintenance industry had not been developed.
The aim and objective of this project was to build a bespoke inventory management system with a flexible quoting tool, which would proactively assist the company’s channel partners and in house team to quote for maintenance business, where speed of response is essential and then once the business is won; to convert the quote to an order; manage the IT ‘estate’ to be maintained; and provide a service/help desk for call and fault logging.
How Business Solutions Helped
It is fair to say that the senior management team were sceptical at first about whether they would qualify for a claim given the nature of their business. After all, how could the implementation and integration of existing networking technologies be seen as research and development?
However, following a series of scoping meetings with the company, Business Solutions began to focus on the internal software development which was taking place. It was very evident from speaking to the senior management team that that the company had had to introduce new and innovative product and service offerings to meet the needs of their technology savvy, multi-national client base. This required the development of a range of bespoke internal systems and processes to meet the needs of their clients going forward.
Using their vast expertise, Business Solutions were able to highlight that this internal development, along with a number of other eligible projects, qualified Networks First for R&D tax credits.
The successful claims have resulted in a number of business benefits, including:
- Achieving significant cash benefits from 3 successful claims in excess of £120,000.
- Understanding that it’s not just about the development of innovative products for their clients – any internal business innovations can also be eligible.
- Appreciating that in some circumstances, the creation of bespoke IT-based solutions may be classed as eligible research and development projects.
- Realising that there is an ongoing tax benefit by undertaking new and innovative projects, which they may have otherwise avoided due to perceived time and cost implications.
- As a result of the cash benefit, the company are able to invest in new equipment and technologies to further enhance their in-house capabilities in order to continually grow the business.
“Business Solutions took their time to understand our business and its requirements and what we were trying to do to gain competitive advantage. Many of our processes are interlinked, which ruled out many off the shelf products. We needed a system that could go from initial contact and quote to financial results.”
“This development resulted in quite a considerable investment, which we thought we would have to absorb in full, however, with the expertise of BSM we were able to analyse the work being done and allocate relevant elements as R&D. Their knowledge of the criteria for a successful submission and the work they did understanding our company resulted in successful claims and enabled us to invest further.”
You can find out more about this project as well as other cases Business Solutions (Midlands) Ltd have worked on here.