A Wolverhampton based tax specialist has helped a 125 years old manufacturing company successfully reclaim tax spent on research and development.
Halesowen based Glassworks Hounsell has reclaimed £29,400 from HMRC under the research and development (R and D) corporation tax reclaim scheme. The company was founded in 1877 by a John Hounsell.
Chairman Richard Brinkman joined the company in his 20s and organised an MBO (management buy-out) in 1994. Richards son William is now director of sales and the family company has recently been joined by Williams brother, Oliver.
Glassworks Hounsell manufacture precision engineered machinery for making all kinds of industrial formed glass, from furnace batch chargers for recycled glass cullet, electric furnaces for Waterford Crystal, precision moulds for flat screen TVs to blowing irons for the glass industries. The company also manufacture canning and plastic bottle manufacturing machines and specialise in the design and development of tin oxide electrodes used for melting glass.
If we can design it, well build it, says William Brinkman. Weve even made roulette wheels and lifeboat trailers. Even as recently as 30 years ago making glass blowing irons for the local industries was a good business and now we supply just three locally, but its about adapting to change.
The glass manufacturing industry is still our biggest customer and we supply many of the famous names, including crystal companies Waterford and Baccarat. We supply one of the worlds largest producers of building materials, French company Saint Gobain, and 90 per cent of our product is exported, to Europe, the Far East, China, USA and Thailand. The growth in touch screen technology and flat screen TVs and displays has been hugely beneficial to us.
Glassworks Hounsell invest heavily in research and development. If Id been asked how much before we were introduced to R&D Tax Claims Id have said around five per cent, says William. Using evidence we provided, Mark and the team were able to demonstrate that almost half of what we do is R and D, because we have to evolve continuously and learn from every new job. We take a little knowledge from everything we do, so the make-up of the glass, material, geographical location and the machine that makes it are all slightly different.
We dont have a designated R and D department but we learn by trial and error through the process and it can occasionally involve building an entire prototype machine in order to solve problems. Sometimes it can take a year to solve one problem and that involves many costly man hours. But we didnt consider this to be R and D, we were just doing what any company does to stay ahead of the game. We then reinvest the knowledge learned in the next job.
We found out about the HMRC R and D scheme through links with Richard Simpson and the Science City Knowledge Transfer at The University of Birmingham. Richard made the introduction to Mark at R&D Tax Claims. We looked at the scheme about five years ago but didnt feel that we did any white coat development. But Richard Simpson knows our business and thought we should be reclaiming. The cheque for nearly £30,000 proved he was right.
I was very surprised at the speed of everything and were delighted with the reclaim. It was quick and painless and the time invested was minimal. Paul Sherborne of R&D Tax Claims came over and the process only took about a day of our time. We see this as an ongoing process and will be claiming through the scheme yearly from now on.
Mark Evans, managing director of R&D Tax Claims Ltd said, We had to move fast working with Glassworks Hounsell because their year end was approaching. They were willing to invest a very small amount of time which has resulted in a successful reclaim. The process will be even more streamlined next time as they are now working the R and D reclaim element into their accounting practices. We are working more with universities and KTP schemes, as they provide a rich stream of R and D capability and talent and this in turn translates into growth in the jobs market and the successful progression of the UK manufacturing sector.