A major logistics company has received £151,000 in R&D tax incentives from the government despite being told in the past that it would not qualify.
Cartwright Brothers spent hundreds of thousands of pounds on qualifying projects — including improvements that made forklift trucks safer to drive — but the firm was resigned to the fact that it would not be able to access the R&D tax credit scheme.
This all changed when it consulted Catax’s experts and the company has now successfully collected £150,850 in tax relief for multiple projects that qualified under HMRC’s criteria.
The haulage and warehousing specialist, based in Lincoln, Lincolnshire, has a fleet of 60 vehicles and over 200,000 square feet of heated warehousing spread across three sites.
The firm has taken on a series of innovative projects in recent years. These have included improvements to suspended load restraint systems and specialist trailer modifications. However, the bulk of its innovations have focused on technical advances to the CCTV systems fitted to the firm’s fleet of forklift trucks.
The company wanted to make forklift truck driving safer for staff and the goods in its care because visibility for drivers of forklifts was not ideal. The firm resolved to develop a remote camera array that fitted to the trucks’ masts, which had numerous advantages.
The camera array was designed to display a 360⁰ view on a screen inside the cab to help drivers negotiate obstacles and look out for hazards. It also records footage for playback if required, and sends real-time video to smart devices and screens in a control room so activity in the warehouse can be monitored live.
The most challenging aspect of the project involved working out how to ensure the system could transmit all the necessary data inside a metal warehouse that was prone to signal interference. In addition, Cartwright Bros experimented with ways of transmitting the signals offsite for longer-term storage and had to develop protective housing to defend the equipment from the rigours of the warehouse environment.
R&D tax credits were introduced by the government in 2000 to incentivise innovation, and result in either a reduction in a limited company’s corporation tax bill or a cash lump sum.
Many firms don’t realise the work they do qualifies as R&D, which is defined as any work that seeks to resolve a scientific or technological uncertainty, whether that’s a new process, product or service. Crucially, R&D work does not need to have been successful to qualify and claims can be made up to two years beyond the end of the tax year in which the work took place.
Jamie Cartwright, Director of Cartwright Brothers, said:
“It came as a complete surprise that we were entitled to claim tax relief for these projects. We knew they were innovative but we had been told previously that they did not qualify.
To think we could have missed out on such a large sum had we not claimed in time is extremely irritating, and there’s no doubt in my mind that many other haulage industry firms will be in that precise situation right now.
We’re incredibly grateful to Catax. They left no stone unturned and our improved knowledge of the scheme will inform which projects we undertake in the future. We got back a huge sum of money and it has made a real difference to the business, as we were able to reinvest it in the company’s assets.”
Richard Armstrong, Partnerships Director of specialist R&D tax consultancy Catax, commented:
“We frequently come across companies who are entitled to make valuable claims despite having been told, in the past, that their work does not qualify.
R&D tax credits are a complex tax area and that’s why not all tax advisers and accountants understand enough about the scheme to accurately identify which clients, and what specific pieces of work, fall under HMRC’s definition of qualifying work.
Cartwright Bros have now received a significant tax benefit and it is well deserved given their sterling efforts to lead from the front and improve industry best practice.”
Richard Armstrong can be reached at Richard.Armstrong@catax.com.