Apreco’s pursuit of excellence has seen continual development in all areas of the business giving rise to a broad range of activity for which R&D tax relief could be applied. Haines Watts worked with the company to identify all the R&D qualifying activity and also helped Apreco benefit from the Patent Box scheme which enables companies to apply a lower rate of corporation tax to profits earned from patented inventions.
R&D Qualifying Activity
The innovative and ground breaking work undertaken by Apreco is an excellent example of the type of activity R&D tax relief is designed to encourage. As well as continually improving and adapting its products to meet the demands of its international clients, Apreco sought to improve the way it delivers services through a company-wide process re-engineering programme. The programme was highly effective in increasing efficiencies and reducing costs as measured by a significant increase in operating margin.
Projects undertaken by Apreco to achieve appreciable improvements to products, services and processes, and which therefore qualified for R&D tax relief, include:
- Prototype design and pre-production of new and improved products;
- Adoption of new/emerging technology and technical upskilling;
- Proprietary software upgrades;
- Pure research joint venture collaborations;
- New warehousing solutions;
- IT infrastructure overhaul;
- A new integrated management information system;
- Appreciable improvements to the 4 tier Quality Control System;
What this Case Study Demonstrates
The Apreco example shows that, when it comes to R&D tax relief, it’s not just what you do that matters but also the way you do it. Projects which seek improvements to processes, as long as the effects of the effort can be measured, can qualify as R&D activity and should not be overlooked.
This case study also highlights how entering new markets, particularly overseas, can necessitate product adaptation to meet new regulatory standards or specifications which can qualify as R&D activity.
In addition to the effective handling of our R&D claims, Haines Watts provided a timely introduction to the Patent Box regime which meant we were able to benefit from more flexible and favourable provisions before the rules changed. We are happy we came across this particular expertise when we did.
Mike Hodges Apreco