“As the demand for our novel fishing technology surged with the rise in demand of British fish, we needed funding to expand with it. We came across Adsum who identified a large sum of money we could reclaim from HMRC as R&D Tax returns. We were able to get access to the capital from Adsum within 2 days and Adsum handled the rest! “
U.K. Research and Development (R&D) Tax incentives are designed to encourage companies to invest resources into innovation. The scheme allows companies to claim cash rebates at the end of the financial year by submitting R&D claims in the Corporate Tax CT600 form. The R&D tax credits are calculated as a percentage rebate of costs associated such as staffing costs and hours worked on R&D projects. Globally the most active sectors in R&D are pharmaceuticals, software development, automotive industry, biotechnology, electronics and hardware. The size of rebate varies greatly and is approximately 20-25% of the expenses spent on R&D.
The client, an innovative firm based in Scotland, has been developing technology for growing farmed salmon. They have been in the agricultural and fishing business for over 10 years and started as a family run farm. As demand for sustainably sourced products grew the client needed to expand operations and fund the innovation. The business was in a healthy state and keen to raise money to meet consumer demand for British fish. The client had a revenue of £300,000, no debt and had spent £45,000 on buying materials, paying for software developers and external consultants to develop a new sustainable farming solution. It is a 3 year project and the client needed to receive the funds at the earliest to be able to fund the next stage of the project.
With the end of March being the tax year end, the client had spent £45,000 by January and approached Adsum for funding. Adsum was recommended to the client by his accountant who took interest in the R & D claims market and has worked with Adsum before. In addition to the regular accounting services, the accountant had also prepared the client’s R&D tax return. The client’s accountant received an online quote to finance the R & D claim for 6 months at 2% a month interest to cover the cash flow gap. An online consultation with Adsum’s in-house R&D specialist was scheduled on the same day and further £5,000 identified as qualifying expenditure. Client paid a £999 deposit and received access to SaSa, Adsum’s client portal within 24h. The client’s accountant uploaded the documents directly from Xero.
Adsum released £43,000 directly to the client’s bank account within 48h. Directors of the firm provided a personal guarantee and Adsum registered a debenture to permit tax reclaim recovery. There was no need for an external solicitor or an accountant and a fully automated loan process allowed the client to access funds quickly. Adsum further helped the client by working with an accountant to submit the R&D claim and answered HMRC questions raised on expenditure items in CT600 hence further saving costs for the client and his team. Adsum continues to work with the client’s accountant and is looking to provide further financing against VAT rebates due from HMRC to enhance working capital and allow the client to meet customer demand for healthy sustainable foods.