D & G Mechanical Engineering Ltd proved to be another prime example of an extremely talented and competent company involved in R&D on an almost daily basis without realising it.
D & G are constantly pushing the boundaries designing new and innovative solutions, in the majority of cases from an idea or spark of inspiration from the business founder David Bowie. The HM Revenue and Customs (HMRC) criteria for edibility centres on two key aspects – are new or improved products being created or does the design and development involve some uncertainty for which the answers were not obvious?
It was clear to Fiscale from the very first conversation with D & G that they were ticking both of these boxes by designing and building new and innovative machinery - just as they had been doing for over 30 years. Our challenge was to ensure that we got to the bottom of every project so that we did not miss anything that was eligible from the R&D Tax Credit claim.
The Background David spends the majority of his time on R&D and is supported by a team of fully qualified and highly skilled design and workshop engineers and metal fabricators. Their objective is to utilise the expertise and passion for engineering to produce machines and equipment that are at the leading edge of the industry. D & G work across a diverse range of industries including the environmental services, construction, extraction, industrial and agricultural sectors. There is no such thing as a typical customer or typical product.
Like many engineering and manufacturing companies, D & G had not associated their design capability with R&D. It was just something that they did to find the ideal solution to problems they encountered with existing machines used in the industries they service. D & G were surprised to learn that there was actually a Government incentive to compensate them for their efforts. They were keen to find out more from Fiscale about how they could benefit.
The Solution A ‘basis for claim’ meeting was organised in February between the Managing Director at D & G Mechanical Solutions, and Fiscale’s Technical Director. It soon became apparent that the innovative machines designed and built by the company required a very high level of technical and mechanical engineering expertise and definitely involved aspects of research and development.
Several meetings and in depth telephone calls followed as we worked together to ensure that all the relevant projects from the past two years were included in the claim. When Fiscale were confident
D & G Mechanical Engineering Solutions Ltd Case Study that no stone had been left unturned the draft report was compiled and sent to D & G for the directors to approve before being submitted to the specialist HMRC R&D Tax Credit team in Leicester.
The Results The initial contact with Fiscale took place in February and the cheque from HMRC arrived with D & G Mechanical Solutions in May. D and G were delighted with the size of the cheque that they received. “I think it is fair to say that we have become real advocates of the R&D Tax Credit Scheme. We have recommended it to a number of business colleagues who we think maybe eligible. Of course it does take some time to set up but the returns completely justify the effort.
What we do for our customers is complex and highly technical, no two projects are the same. We went through our order history with Fiscale, job by job, explaining the ins and outs of each one, to assess whether the activity undertaken was in fact research and development.
Assimilating the required information was a time consuming exercise however I believe it was a very useful process as now we have a greater understanding of what constitutes R&D. The team from Fiscale also have more of an insight into our business. A second claim is now being worked on and it is proving to be a lot simpler to pull together.
This is the beauty of the R&D Tax Credit Scheme - it isn’t just a one off. As long as we continue to undertake research and development for the solutions we provide for our customers we can continue to claim. In effect we have created an extra revenue stream from just doing what we do.
The team from Fiscale are really lovely and easy to get along with – which is important when you have to work so closely together. From the outset we felt that we could trust Fiscale and were convinced that the time we were investing in analysing our projects would pay off.”
David Bowie, MD of D & G Mechanical Solutions
The Conclusion The relationship with Fiscale is ongoing. A second R&D