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Our client, a UK retailer of equipment and accessories for the automobile market, has achieved a reduction in its corporation tax liability to HMRC of more than £20,000 as a result of a successful claim for research and development tax relief.

The claim covered research and development activity undertaken across two accounting periods. One of the R&D projects concerned an attempt to devise a new product and process to prevent automobile fraud. The sale and installation of vehicle trackers forms a large part of our client’s business. Our client considered that existing tracking technology could be improved if it were possible to integrate the tracker with an immobiliser. The concept was that the tracker would be able to detect whether the driver has a ‘tag’.

Where the driver does not have a tag, the tracker would communicate with the immobiliser to disable the car – i.e. ‘no-tag, no-start’. Our client recognised that enhancing a tracker in this way would represent an appreciable improvement in terms of functionality and performance over other commercially available tracking system. It would also offer cost savings over purchasing a separate tracker and immobilisers. At the outset of this project, there was no publicly available, relevant information regarding how to achieve our client’s aim which led to the need to the need for R&D activity to be carried out.

As a result of R&D activity, our client has managed to save more than £20,000 in its corporation tax liability to HMRC.

Corporation Tax Saving- £20,000+

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