Fiscale delve deep to deliver R & D Tax Credit success for marketing services specialist.

 

The old adage “rules are for the obedience of fools and the guidance of wise men” certainly applied in the R & D Tax Credit submission for marketing services company Precision Marketing Group Ltd.

research and design tax credits

Case Study - Precision Marketing Group

The HM Revenue and Customs (HMRC) guidelines clearly state that the activity of marketing is not eligible for relief under the R & D Tax Credit scheme. However the experienced team at Fiscale know only too well that delving a little deeper into a client's business can often uncover a pot of gold.

Precision Marketing offer a wide range of traditional marketing services centred on communication and delivery - their aim is to help clients get to the right people at the right time. In fulfilling this objective Precision has developed bespoke software applications to meet the needs of clients in specific industry sectors.

The background

Precision Marketing started out in 1995 as a “one man band” operating from a home office and has now grown, both organically and through acquisition, to an agency employing over 70 staff across 3 sites with a turnover in excess of £10 million. In May 2015 Precision moved into a new £2 million eco-friendly headquarters with 25,000 square feet of office space.

Precision Marketing provide a comprehensive range of direct marketing services including database and marketing data management; postal services; digital marketing; telemarketing; campaign response handling and print management. Under their specialist division, Precision Digital, they supply lists of targeted healthcare data, provide database management, develop patient support programmes and offer training programme management for pharmacies.

A leading supplier in the marketing industry the company is just one of a handful of mailing houses to have attained ISO14001 accreditation. Clients include household names such as GlaxoSmithKline, Colgate, Johnson & Johnson, Fred Olsen Travel Agents and Care UK.

A long pedigree in the communications and delivery market has enabled Precision Marketing to gain an in depth understanding of a client’s business and the challenges the business faces in delivering their message to customers. As an innovative and proactive organisation Precision Marketing has developed software to enable their clients to achieve their communication goals more effectively.

Precision were aware of the R&D Tax Credit scheme before they were introduced to Fiscale by a supplier but did not realise how much of their work was relevant and eligible for R & D Tax Credit. They were interested to find out more about the scheme and, despite being very busy, arranged an initial meeting with Fiscale. On receiving a substantial cheque from HM Revenue and Customs (HMRC) they realised that they had definitely made the right choice.

The challenge

Precision work with hundreds of clients across a diversity of industry sectors. The scale of their operation is vast, for example they handle the mailing of over 40 million items a year on behalf of their clients. The permutations of client requirements are infinite.

Creativity, innovation and an aptitude for problem solving are factors that have contributed to Precision's ongoing success. The company has built its reputation on creating successful solutions to challenging communication and delivery needs - it is an intrinsic part of their service.

As marketing evolves and becomes ever more personalised increasingly sophisticated solutions are required to communicate quickly and effectively. By definition the communication has to be highly targeted and prompt.

Developing software applications to manage the complexity of the tailored solutions required to resolve specific client needs was a natural progression for Precision. They have developed software for dentists, opticians, estate agents, multinational pharmaceutical companies and the public sector.

The bespoke software development that they have undertaken for clients involves the same degree of technological uncertainty as is faced by any standalone software development company. Developing an application capable of managing complex scenarios, quickly and securely whilst being user friendly necessitates extensive research and development and testing. It is this element of the Precision service that is eligible for R&D Tax Credit relief.

The solution

Precision was introduced to Fiscale by a third party supplier who had been supporting the marketing company with their training and development. The initial ‘basis for claim’ meeting took place in March 2014 with Matthew Caldwell-Nichols, Managing Director at Precision and Fiscale’s Technical Director, Stephen Bunting.

Traditional marketing services do not qualify for R&D Tax Credit as they are not deemed to be ‘science based’. However Stephen was aware of the large portfolio of services that Precision offered and felt confident that if he could ask enough questions he would be able to establish eligibility.

This was indeed the case and after a number of meetings over the course of several months Stephen identified that Precision were involved in a very significant level of research and development with their software solutions.

Stephen compiled the draft report and sent it to Precision for approval before submitting it to the HM Revenue and Customs (HMRC) R&D Tax Credit team in Leicester.

The results

Within two weeks of the claim being approved and submitted Precision received a substantial cheque from HMRC. Matthew was taken aback by the size of the cheque and was very grateful to Fiscale for their tenacity in pursuing the claim.

“Our introduction to Fiscale came at a particularly hectic time as we were planning our move into the new building and organising funding through the LEP’s Growing Business Fund. I am glad that Fiscale stuck with us as the outcome definitely outweighed my expectations! It’s not every day that you receive good news from HMRC!

I know that our case was slightly more complex as our core service is marketing which is not an activity that qualifies for R & D Tax Credit. However Stephen showed a dogged determination to delve deep into the nitty gritty of everything we do and identified that our software development for clients involved a degree of technological uncertainty. Stephen left no stone unturned; his ability to interpret the HMRC guidelines is impressive and resulted in an unexpected windfall for Precision.

My advice to any company, whatever industry they are in and whatever they have read or heard about R&D Tax Credit is to speak to Fiscale, they really are the experts. A short telephone conversation could reap huge rewards for your company.”

 

Matthew Caldwell-Nichols, MD of Precision Marketing

 

The conclusion

Precision is continuing to work with Fiscale and will be submitting a second claim at the end of their next financial year. The team are now aware of what elements of their software development qualifies for R & D Tax Credit and have the appropriate framework in place to accurately record this information.

The R & D Tax Credit relief has been invested in a new business in the healthcare sector.

 

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