A Birkenhead engineering firm has received £65,000 in research and development (R&D) tax credits, thanks to the innovation demonstrated in its bespoke projects.
Fortis Engineering, located on Woodside Business Park, specialises in bespoke fabrication, including steelwork, pipework and other engineering specialties. After the COVID-19 pandemic, Fortis found that its demand for work was declining. Indebted to HMRC for corporation tax payments and with some staff on furlough, like many businesses Fortis was going through a difficult time. What Fortis didn’t realise at the time is that the business was entitled to thousands of pounds from HMRC for research and development that was being carried out in the day-to-day of the business.
The business was approached by Access2Funding, an R&D tax specialist based next door in the business park, in an effort to prove their projects qualified and help them claim back some much-needed funds from HMRC.
As an engineering firm that specialise in bespoke steelwork, a lot of the work Fortis was doing was able to qualify for R&D. The research of different steels, the development of different designs, and even the research into the areas where the steelwork or pipework needs to be installed all are eligible for R&D relief.
Craig Fletcher, Managing Director at Fortis, said: “When it’s something bespoke, on the design side I would say around 80 – 90% of it is R&D. You’ve got to research how you can make it, what materials you can use, where it’s going.
“Before we did the claim we thought there would be a lot of work involved and a lot of evidence you would have to produce, but that isn’t the case. For the amount of work that you put in for the amount of money you get back – it’s a no brainer.”
The first two claims have gone towards previous debts that Fortis had with HMRC, and to clear corporation tax debts. Going forward, Fortis plan to use the money from the next claim to boost cashflow, with plans to purchase new stock and new vehicles for the business.
Speaking about how the extra money helped the company out, Craig said:
“Going forward, we’re going to actually be able to buy things, rather than rent them. We’d look to invest it back into the business, to help us grow.”
Leslie Maloney, tax specialist at Access2Funding, said: “R&D tax credits are an HMRC incentive to encourage UK businesses to continue to grow by innovating. The incentive being a reduction in corporation tax or a cash payment.
“If a business is seeking to resolve a scientific or technological uncertainty within its projects by creating new processes, products or services (or amending existing ones) then they could be performing R&D without realising it.”
