Graham Beck

Graham Beck

Tech know-how wins tax credits

Jumpstart’s experts don’t just understand the tax rules, they understand the science, as Bryce Wilcock reports.

An engineer at heart, Graham Beck landed his perfect job when he was offered the role as a technical analyst at research and development (R&D) tax credit specialist Jumpstart.

Having studied energy engineering at Edinburgh Napier University, Beck went on to complete a postgraduate diploma in engineering design before landing his first role as a graduate mechanical engineer. That was 1998 and since then he has worked in a variety of roles from being a senior mechanical engineer to a project engineer, before landing a role as a project manager. It was at this point he decided to take a step up and become a technical analyst at Jumpstart.

Jumpstart is the UK’s leading R&D tax credit specialist providing a complete end-to-end service in claiming R&D tax relief on behalf of businesses. The government-backed scheme rewards companies across all sectors in the UK for investing in research and development.

“As a project manager, I was the bridge between the designers and the clients, so I had to be able to interact with managing directors and financial directors whilst being able to understand the technology and the language the designers were using.” he said.  “Having experience in all of those roles has certainly helped me, in terms of understanding the clients, so they don’t have to spend half a meeting explaining the technology to me.

Jumpstart“Obviously, I don’t claim to know clients’ businesses as well as they do, they are immersed in the business everyday, but I understand the principles of the technology they are seeking to advance and the constraints they are working within. I also have a better appreciation for the baseline knowledge across industry sectors. It certainly helps the clients and quickens the process.”

This understanding of their clients’ needs and being able to swiftly identify when and how they’re eligible to claim R&D tax credits is what makes Jumpstart stand out from its competitors. Each of the firm’s technical analysts have a key discipline which they specialise in. They offer more than just sound financial advice but also industry knowledge.

Graham’s work experience lies in mechanical engineering relating to water and wastewater treatment plant design and installation, rotational equipment maintenance and repair, as well as project engineering within manufacturing companies and design consultancies. He works with clients in general engineering, materials science, precision engineering and related disciplines.

“I think initially a lot of other companies that were specialising in R&D tax credits, such as the big four accountancy firms, focused on employing accountants with little technical background or understanding,” he said. “Jumpstart’s technical analysts for the most part are PhD level educated scientists who have industry experience. Those that don’t have PhDs have a wealth of post qualification industrial experience, which in this sector is just as important, as it provides invaluable insight in to industrial R&D processes and rationale.”

“We understand the language that technical people talk so it’s a lot easier and it’s a lot quicker for businesses to use us. The client doesn’t have to write their own report. They participate in a technical meeting that usually lasts a couple of hours then hand everything over to us and we’ll go away, process the data and produce a report for HMRC.”

Gordon Brown introduced R&D tax relief on corporation tax in 2000 when he was Chancellor of the Exchequer. The scheme was designed to encourage businesses to invest in R&D.

So, you might be wondering, like I was, how the process works? “First of all, we explain to companies how HMRC defines research and development,” Beck explains. “Generally they must be advancing processes or technology beyond the existing industry baseline. Although in some instances companies can qualify for R&D tax relief even when the issue they are addressing has been resolved by another party, as long as the solution (for whatever reason) has never been made publicly available. They may even qualify for R&D tax credits in advancing equipment which is seen as being “industry standard” if the technical issues in achieving the advance are not readily deducible.

“It isn’t as simple as that though, as an advance on its own isn’t eligible, it has to also have what HMRC calls ‘technological uncertainty.’ This means that it can’t be readily deducible and you must be using competent professionals, the answer isn’t immediately obvious.

“There has to be a period of experimentation, testing or going from a conceptual design, detailed design, building a prototype, testing that prototype, going back and changing the design etc, experimenting with different geometries and materials, that sort of thing.

“And it’s not just product design, it’s process as well. Any project where a company has to invest in advancing the underlying technology, where the solution isn’t readily deducible. That would constitute eligible R&D from HMRC’s perspective.”

Jumpstart montageIt’s the firm’s commitment to helping companies innovate and being at the forefront of technological advances across the engineering sector, which makes it the perfect role for Beck. “I spend half the week out at client meetings and half the week in the office.

“If I’m out at a meeting, I’ll usually be sitting down with the technical and maybe the financial team of the company, talking about the scheme, their technologies and explaining how this could fit in with the scheme.

“The financial people go through the costs, how much they’ve spent, what eligible costs could be claimed back through R&D tax credits and work out how they could benefit. When I go back to our office I then work on the technical report which explains to HMRC how a company’s projects fits the criteria. I spend a lot of time writing the reports and spreadsheets to identify all of the eligible expenditures.

“For me going out and speaking to the companies and the technical engineers that get involved in the claim is fascinating. You get shown around the factories and see the state-of-the-art engineering and technology in action. That’s what interests me the most.”

But despite how beneficial R&D tax credits can be to businesses, it isn’t as easy as you would think to get companies to claim. One of Jumpstart’s biggest challenges is making businesses aware of the scheme and encouraging them to try and claim relief for their R&D.

“People’s conception of R&D as being something that is performed in a lab is a huge challenge for us,” Beck said. “If you go to say, a precision engineering client, engineers genuinely seem to think that every day they’re solving problems so they don’t tend to think of their work as R&D. To them, they’re just doing their jobs.

“You have to explain to them that HMRC isn’t just providing relief for the life sciences industry, it is available to businesses of all shapes and sizes. It’s basically a matter of trying to enable them to embrace the scheme and get on board and obviously, so long as they meet the eligibility criteria, any company potentially could be eligible to get some money back. It’s just a matter of getting over that hurdle where they have scepticism about the scheme and explaining that it could apply to them.”

Jumpstart and its expert team of technical analysts have helped their clients reclaim almost £100m in research and development tax relief since the company’s launch and it doesn’t stop there. Beck and his colleagues are on a mission to continue raising awareness of the scheme and encourage even more businesses to get involved.

“Every day is different with each new company dealing in a different aspect of technology and addressing new challenges. That’s what makes the job so exciting and enjoyable” he said. “Looking forward, the plan is to assist more SMEs through the claim process and help keep UK businesses innovating and improving their competitive edge.”

“I enjoy all aspects of working at Jumpstart; the work, the challenges and the satisfaction of knowing I am helping SMEs fund their R&D activities. Every week I’m meeting new people from companies across the country. I come back to the office and I talk to the guys about how they’re getting on with their claims and what obstacles they’ve had to overcome, every day is a school day, it’s great.”

It’s not just businesses from the life sciences, engineering and manufacturing sectors which are eligible either, as Beck was keen to point out: “I specialise in engineering and manufacturing however there is a wide mix of companies who come to Jumpstart.

“We have quite a few software technical analysts as we get a lot of software companies and projects. We also have food and drink clients, we get all kinds of businesses applying. Sometimes we have a few technical analysts working on the same claim. For example, there could be a claim which includes software, machinery and manufacturing. If there is a crossover of skillsets, we could send two or three analysts out to see the client.

“There are also a lot of small companies where directors forego their salaries to support the company’s investment in R&D. We have helped some of these businesses realise benefit on that R&D investment. This can make a huge difference to companies and free up valuable funds for reinvestment in new equipment, new staff or commercialisation of the results of their innovation.

“If you’re a business of any size which has recently invested in or is about to invest in innovative work on new products and process, or improving existing products, then get in touch with Jumpstart. We can let you know if you’re eligible and help you push forward. It’s worth a chat!”

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