![](https://cdn.mtdcnc.global/cnc/wp-content/uploads/2024/08/16211914/honeall3-517x360.jpg)
Hone-All Precision Celebrates Exceptional Growth and Continued Excellence in Precision Engineering
Hone-All Precision, a premier name in precision engineering and manufacturing, is delighted to announce a period…
The Governments Industrial Strategy has been discussed and debated over recent months and as several have said, there are many great ideas but fewer specific commitments as to how and when these will be achieved. Missions, foundations and pillars are all emotive, descriptive terms but it’s how they translate these into direct action that we smaller businesses need to see and believe. The Government’s commitment to achieve a level of R&D investment of 2.4% of GDP is admirable but nothing has been specified as to how they will achieve this target and what support will be given to businesses to maximise the benefits of this fantastic scheme. Larger businesses are often in a better position to utilise the scheme to the maximum, often with in-house specialists who have the ability and expertise to dissect the rules and regulations to the fullest and then implement processes and procedures, or indeed bespoke programmes to ensure that investment in R&D is maximised but the cost to the company minimised. Smaller businesses rarely have this in-house function and too many believe the scheme is not applicable or appropriate to their business due to the stringent rules and administrative burden it can create. In our opinion, this stems from a complete lack of clarity from the Government about what and which activities constitute R&D. They have published numerous documents to assist but the lack of manufacturing support programmes and funding has meant that this tax credit is one benefit to manufacturing that is rarely utilised in smaller businesses. Many are losing tens of thousands of pounds in tax credits they are entitled to for R&D they carry out on a daily basis. The problem is, they don’t realise it’s actually R&D and there’s no one out there to help educate them or demonstrate in practical terms exactly what constitutes activities they can claim for. Alternatively, other companies (like us here at Hone-All), pay a specialist between 10 & 20% to assist us in our applications due to the complexity of the scheme, the ambiguity of the rules and a lack of clarity on what can and can’t be claimed for. This is money we could, and should, be spending on our businesses as the scheme is there to improve our technology, our processes, improve the competitiveness and innovation of UK manufacturing and enable further investment and growth. In An SME, What Constitutes R&D And What Can We Claim For? Obviously, there are differing definitions due to the complexity of the guidelines but here at Hone-All, we want to promote all UK manufacturing and improve not only our own competitiveness and innovation but that of the entire industry so here are a few examples which you may recognise as an ongoing activity of your business. We hope that these may help you think a little differently about the scheme and, if nothing else, prompt a conversation with a specialist who may be able to assist you in claiming the tax credits you are fully entitled to. Firstly, you can claim for two full years prior to your current year so you can apply retrospectively. This is a major incentive to find out more as the tax credits can be either repayable directly to you or can be offset against your corporation tax bill – both assisting cash flow and enabling further investment. Secondly, you can claim for materials (tested to destruction), components, specialists who assisted in your project (e.g. electricians, consultants etc.), a proportion of the salaries paid to employees involved, and a proportion of your light and heating costs. So How Does This Translate Into Reality? Imagine, a customer comes to you and wants you to manufacture a part never made before and is beyond your current capability or that of your equipment. You hope this design or component can be manufactured and the parameters achieved with a little time, newly designed tooling, adaption of your machine or your processes or equipment. The first stage is to design the tooling or adaptation you need to make – a percentage of the salary for this can be claimed for. You purchase materials to manufacture the tooling but it takes two or three attempts to get the tooling to work correctly. The materials for the unsuccessful attempts can be claimed for. When you go to use the tooling, it’s not quite right so the first component is unacceptable – the material, the tooling used, and time spent on that component can be claimed for. Alternatively, you need to adapt your machine but you are uncertain if it will work, but if it does work it will create an advancement in technology and/or capacity. The work done, parts bought, contractors brought in, engineers time – all can be claimed for! The fact is, projects can be successful and unsuccessful. All you must demonstrate is that there was a technological uncertainty as to whether it could be achieved, you have innovated, you have engineered a method to achieve a technological advancement and even if it doesn’t work, a claim can still be made! Within SME’s we are doing this sort of activity daily, whether it is redesigning/re-engineering a tool because tooling to cover the particular requirement doesn’t exist; adapting a machine to do something it couldn’t before; running off prototypes to prove a process as it’s something you’ve never done or you’re simply working to parameters you’ve never achieved before. Even something as simple as designing a brand new jig or fixture to clamp a difficult job can be claimed for. Now ask yourself, how often are you or your engineers doing this on a daily/weekly basis? And what sort of costs are involved? In theory, it’s a simple scheme and the Government have published a guide for SME’s which you can read here. We believe this has gone some way to explaining the scheme but we hope our example here may illustrate some of the content of the guide into a more practical, common sense definition. In practice, the application is a little more complex which is why here at Hone-All, we use an R&D specialist to assist with the final submission. However, the rest of the documenting of the costs, expenses and projects, we do ourselves. We are willing to help and offer practical advice as we do for many customers and suppliers, many other companies are willing to help too but the Government must support us by publishing more practical case studies of successful R&D claims from within our sector. This may just open the hearts and minds of our SME’s and enable claims to be made for what most of us see as our everyday operations. The credits received would free up cash flow for further investment and increased R&D leads to continuous improvement and a positive cycle commences. Simplifying the scheme and offering more targeted business support to those wishing to claim would probably achieve and exceed the Government’s target of 2.4% within a much faster time frame than the 2027 quoted.
Be first to see all the updates from MTDCNC
Our newsletters frequency varies dependant on content
All the latest deals from the industry feature on our newsletters