News
R&D claim pays out £18,000 for company’s innovation in Automotive and Electrical sectors
29 Mar 2021
Tim Lwin, Tax Partner
Specialists in the WR Partners Tax team were able to help a client in making real tax savings after successfully claiming R&D tax relief on their behalf. Two innovative products developed for the automotive and electrical industry sectors were created by our client, allowing them to claim £18,000 in tax free cash from HMRC for the costs of materials and salaries of the directors.
These products are now under a patent and the profit on sales of products with a patent or licence is subject to tax at 10% compared to 19% allowing the company to continue making tax savings.
To do this the company developed a new gear shift mechanism on motorcycles that allows gear changes with zero foot movements, allowing for smoother and quicker changes and a smart switch for small storage rooms that shuts off the light automatically after a time delay. The switch can be used with any existing devices and is much more practical and cost-effective than using a sensor system.
Tax Partner, Tim Lwin explains why this claim led to a real business advantage for the client. “This is a great example of how R&D tax relief can really benefit a business. With support and advice our client was able to claim tax free cash back for the initial research carried out and when profits are made on selling the products, the business will get taxed at half corporation tax rates even when rising to 25%, so saving 12.5%”.
Here to help
If you are selling products that have a patent or licence, please contact our R&D experts to find out how you could benefit from this form of tax relief, email; hello@wrpartners.co.uk
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