R&D tax reliefs for a leading car parts wholesaler

The Problem

One of our existing clients is a leading wholesaler of car parts. Their customers include businesses, workshops, Government Organisations, Charities and NGO’s in over 50 countries. The company had never made an R&D claim before and were not aware that they would ever have any qualifying projects.

During 2016, the company spent significant time developing a new end user sales system and website. They developed a system that is unique in their industry and had functionality to be used by all customer types and introduced multiple basket capability. The audit team at Wilson Partners referred the client to the tax team.

The Solution

We discussed the project in detail with the head of IT at the client, and identified some significant qualifying spend for R&D purposes. The work met the qualifying criteria because it was seeking an advance in technology in the industry, and was something that was not available from competitors in the market.

The project specifics were discussed in detail with the development team and we worked with the finance team to extract the relevant costs. We then worked closely with the Audit team to ensure that this was correctly disclosed in the tax computation and submitted to HMRC. The claim was accepted by HMRC without any queries being raised and resulted in a £54k tax saving for the client.

This case shows the benefit of working with a tax advisor who has intricate knowledge of the tax legislation, as well as having the time to understand the nature of the client’s industry, to compile a robust and accurate R&D claim.

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The claim was accepted by HMRC without any queries being raised and resulted in a £54k tax saving for the client.

This was a prime example of a company not in one of the traditional research and development industries having an R&D tax relief claim. By speaking to the right people within the company, we managed to successfully assess the claim and capture the qualifying spend.

Steve Lawrey, Wilson Partners Ltd ,
R&D tax reliefs for a leading car parts wholesaler