Engineers boosted by R&D tax rebate

 WOLVERHAMPTON-based consultancy R&D Tax and Grants has helped a Staffordshire precision engineering company successfully reclaim research and development tax from HM Revenue & Customs.

Brown and Holmes, based on the Lichfield Road Trading Estate, Tamworth was established in 1939 and was family owned until March 2001, when it was sold. The company later fell into administration, and in 2003 was taken over by two employees, Kevin Ward and Carl Baker, in a management buyout.

In the first year after the MBO, the company turned over £850,000. This has now risen to £3.6m and the company employs 47 people.

R&D Tax and Grants Ltd was set up in April 2009 to assist companies who invest in research and development by helping them claim back extra tax relief on every pound the business spends in developing new products or introducing new and improved processes.

The company works with SMEs like Brown and Holmes – manufacturing companies with up to 500 employees and a turnover of less than €100m  – to help them receive tax refunds quickly, as well as similar annual reductions on their corporation tax bills in the future.

Kevin Ward, joint director of Brown and Holmes said: “We sat down and analysed our business with the team from R&D Tax and Grants and discovered that around 35–45% of our work is in research and development, and we were actually already marketing our research and development strengths.”

Brown and Holmes recently exhibited at the MACH 2010 show at the NEC . The exhibition attracted over 20,000 visitors.

“We had a very good MACH and already have a record order book for this year,” said Mr Ward.

“We are looking to increase our exports and already have a good client in Scandinavia. We have a number of UK blue chip clients for our machine tooling across differing manufacturing sectors, including aerospace, defence, automotive, oil and gas. We try to spread the market so that when one sector goes quiet another becomes busy – we adapt to the shift in demand.”

After working with R&D Tax and Grants the firm was able to claim back a substantial amount from HMRC on tax paid and it said the money would be vital in further developing the business.

“Much of the work we have to complete to get to quotation stage is unpaid, and the tax we have reclaimed has helped us to support that process,” said Mr Ward.

“R&D Tax and Grants have helped us gain a welcome cash injection into the business and this will help us expand our export market over the next few years. The UK manufacturing industries badly need this support.”

Mark Evans, managing director of R&D Tax and Grants, said: “There are fantastic engineering companies in this region who are not getting the help they deserve. Since we started the company, we have helped UK based manufacturers claim back £1.7m from HMRC.”