Seeking a second opinion from R&D Tax Credits specialist Fiscale delivers dividends for a company committed to improving and saving lives with state of the art medical devices.
Case Study - Dot Medical
R&D Tax Credits is a complex area and for the layman it can be easy to misinterpret the eligibility criteria as set out by HM Revenue & Customs (HMRC). This can result in missing out on years of R&D Tax Credits Relief and the opportunity to inject extra tax free money courtesy of HMRC into your business. This was the situation with Dot Medical. The R&D Tax Credit incentive had been reviewed internally and it was thought that the company did not have grounds for a claim. An introduction to Fiscale from a professional advisor soon set the record straight!
Dot Medical's mission is to provide exemplary quality, service and leading edge technology in the field of health care. Research and development is a critical factor in achieving this objective and keeping the company at the forefront of medical technology.
Retaining a reputation for providing innovative solutions in the field of Cardiology requires continuous development and enhancement of the core products. The creation of new devices that satisfy the needs of the regulators and stakeholders is a complex, lengthy and expensive process that involves a high degree of uncertainty. Improvements to existing products and new product development involve an element of uncertainty and meet the criteria for R&D Tax Credit Relief eligibility as outlined by HMRC.
A 20 minute phone call was enough for Fiscale to know that Dot Medical was undertaking research and development activities which satisfied the criteria for eligibility.
Just 7 weeks after the initial contact Dot Medical was in receipt of a sizeable payment from HMRC.
In 1997 Dr Ian Rankin founded Dot Medical with an aspiration to create a leading worldwide medical devices company. Over the past 19 years Dot Medical has established a reputation for innovation within the medical community by using technology to create innovative solutions to technical problems.
Working with a number of trusted partners Dot Medical offers a portfolio of over 300 state of the art products in eight key medical areas including Cardiac Surgery, Interventional Cardiology and Intensive Care. The principal aim is to ease and aid patient care.
Dot Medical has a particular interest in the treatment of Atrial Fibrillation (AF). Patients with AF have an irregular and sometimes fast heartbeat which if left untreated can lead to a high risk of stroke or heart failure. One of the main treatments for AF is a cardioversion, a form of electrical shock therapy. Dot Medical recognised the inconsistencies of External Cardioversions when treating overweight and obese AF patients. The company identified there was a need for a more effective method that could access the heart more efficiently.
The Alert™ Internal Cardioversion System was developed in response to this need. The cutting edge technology involves a small catheter being inserted inside the heart. Electrical shocks are administered to jolt the heart back into rhythm. The machine has a higher probability for success than the External Cardioversion method and rarely fails to shock the heart back into a sinus rhythm.
The Alert™ is manufactured in the UK and sold nationally and across Europe to hospitals, clinics and electrophysiologists through a network of distributors.
The team at Dot Medical were aware of the R&D Tax Credits initiative and had considered submitting a claim but had decided that their R&D activities were not eligible. After discussing with a professional advisor Dot Medical was recommended to get in touch with Fiscale.
An ageing population, increased health awareness and a rise in the cost of healthcare are all factors which are impacting on the global healthcare market. Operating in this environment brings many challenges. Medical device manufacturers are under pressure to develop safe, reliable, cost effective solutions swiftly.
The market for medical devices is growing as new geographical markets emerge. The competition is intensifying with the consolidation of existing players and new entrants to the industry. In order to compete effectively Dot Medical has to innovate quickly.
The increased complexity and sophistication of devices is fuelling a rise in research and development expenditure. There is a more demanding and diverse customer base who are looking for higher returns from their capital and expense budgets. The regulatory environment is complex and ever changing. Compliance in one country does not mean a device meets the regulations elsewhere in the world.
The key challenge for Dot Medical is to design for value and to develop a cost effective device that can satisfy the needs of all the stakeholders - regulators, medical practitioners and patients. The technical and complex nature of the device should not impact on the user experience. Dot Medical keep simplicity and ease of use central to it's research and development process.
Fiscale were introduced to Dot Medical's Managing Director, Dr Ian Rankin, by a professional referrer. Dot Medical had previously been advised that they were not eligible for a R&D Tax Credit claim, but after a 20-minute phone conversation with Stephen Bunting, Fiscale's Technical Director, the outlook looked more positive. Dot Medical's Financial Year End was only weeks away which added real urgency to the discussion. The Fiscale team were on site at the Dot Medical offices in Macclesfield within 2 days and pulled out all the stops to complete a substantial claim in time to meet the Year End deadline.
The key areas for technological uncertainty related to ensuring the product was effective for the use intended and that the numerous regulations and compliance requirements were being met.
It took just seven weeks, from the point of the initial contact, to Dot Medical receiving a substantial payment from HMRC covering R&D Tax Credits Relief for a two year period.
Ian was delighted with the size of the payment and the speed with which the claim had been put together by Fiscale.
"It is amazing that in under two months we went from thinking that we had no grounds for an R&D Tax Credits claim to receiving a substantial payment from HMRC. I am so glad that we were encouraged to revisit the scheme by one of our business advisors and listened to their recommendation to work with Fiscale. That was certainly a profitable conversation!
The team at Fiscale were extremely easy to work with and their communication was excellent. It is clear that Fiscale have a lot of experience and a high level of attention to detail, they are very thorough. Our input to the process was minimal. I spent around a day, along with my finance team, reviewing our projects using the guidelines from Fiscale.
The medical industry is challenging. Bringing a new product to market is a lengthy and expensive process. Carrying out clinical trials and complying with stringent regulations is just the tip of the iceberg. There are a lot of upfront costs before one sale is made so any financial support to offset all that investment is very welcome. New product development not only drives our growth but it also helps us to save and improve lives.
My advice to other businesses with regard to the R&D Tax Credits Relief is to find out if you are eligible - you have nothing to lose and everything to gain."
Dr Ian Rankin, Managing Director, Dot Medical Ltd
The R&D Tax Credit Relief received will be used for future investment in the company.
The company is continuing to work with Fiscale and have received a further substantial payment.
Fiscale has helped to implement a new record keeping system to enable Dot Medical to easily record the activities undertaken that qualify for R&D Tax Credits Relief.
The input required from the Dot Medical team in the preparation of future claims has been reduced as they are now aware of the information required and how it should be presented.