Published: 00:01, 13 October 2016 |
A high-end wine retailer might not be the first company which comes to mind when talking about research and development.
When Stuart McCloskey, owner of merchant Z&B Vintners, found himself inventing a new mobile wine store, little did he know he was on the path to a £40,000 windfall from the taxman.
The company, based in Lenham, near Maidstone, was eligible to claim research and development (R&D) tax credits. Since they were introduced for small and medium-sized businesses (SMEs) in 2000, nearly £14 billion has been claimed back by companies across the UK.
Access to these funds is not limited to pharmaceutical and life science businesses. Mr McCloskey spent a year building his bespoke moveable wine store, which turned two 20ft shipping containers into a 60sq m shop capable of displaying 4,000 bottles of wine and storing 1,500 more. It cost the company £250,000 but the blow was softened by the tax rebate, which has gone into buying more stock, with bottles sold worth between £10 and £500.
“It was something unique,” said Mr McCloskey. “It was a one-off build which we designed ourselves with a couple of engineers.
“We have a very entrepreneurial spirit here and we felt a bricks and mortar store got us bogged down in the foundations. Now we can go into a field if needed and go to the people we want to sell to.”
Despite the impact it has on firms, there are concerns among experts not enough businesses are aware of what they can claim.
HMRC’s latest statistics revealed the number of SMEs claiming the credits rose to 18,630 in 2014/15. Although the total increased by 2,625 companies, up 16%, it is a drop in the ocean compared to the 5.4 million small and medium-sized businesses in the UK.
Sue Nelson is chief executive of Breakthrough Funding in Ashford, part of a whole industry of firms which has emerged to help companies reclaim R&D tax rebates.
She said: “We’re disappointed in the small increase and we’d like to see the figure double, at least, in the coming year.
“We’re also worried that while the average claim has risen to £58,776 – a hike of 22% since 2013/14 – this may well mean that fewer micro companies are applying for this fantastic government incentive.
“This is something that HMRC does really well, so it’s essential that everyone knows about it.”
Mr McCloskey is already planning his next claim, as the firm considers building new offices next year. He is shocked at the low take-up of the credits.
“It’s bonkers. We worked with our accountants for 10 years and at no point did they suggest anything like this.
“The more people who know about this the better. It is a phenomenal idea which has freed up money.
“We are thinking of building our own offices next year and we are thinking how we can maximise R&D tax credits for it. It makes sense.”
Every morning at 10am we play you an hour of tunes from the 90s. We call it, #WeLoveThe90s.
Play 'Say It' with Garry and Laura on kmfm Breakfast and you could win £1,000!
Wake up to kmfm Breakfast with Garry and Laura - it's Kent's alarm call.
Your No1 guide to getting married in Kent. From dresses to discos and venues to veils, we've got everything you could possibly need for your big day
Education, Training & Childcare is a special supplement published by KM Media Group four times a year. Click here for latest e-edition.
A guide for your future. For year 11 students in Kent and Medway. Click here for the e-edition.
We have four editions of our Kent Homes, Gardens and Interiors magazine for you to read. Click here to view them all.