Icarus Training Systems Ltd flying high after R&D Tax Credit success!
Spirits were certainly soaring at manufacturing company Icarus following their introduction to R & D Tax Credit advisors Fiscale.
Case Study - Icarus Training Systems Ltd
Icarus is a leading manufacturer of highly specialised technical and inflatable equipment for the aviation, aerospace, defence and security industries. Research and development is an intrinsic part of the company's day to day operations and underpins its success as a world leader in a niche market. However until they met Fiscale Icarus was not convinced of the value of the R&D Tax Credit scheme versus the potential work that an application could involve.
Fiscale's expertise and enthusiasm gave Icarus the confidence and peace of mind to put their concerns to one side and progress with a claim.
Icarus had been contacted on several occasions by other firms of R&D Tax Credit consultants but did not feel confident that their needs as a small business could be met adequately by these companies. Following a recommendation from his accountant, and an introductory phone call with Fiscale, Operations Director Stuart Haycock felt reassured that he had finally found an R&D Tax Credit specialist that would offer his company the correct level of support.
In less than 12 weeks after the initial contact with Fiscale was made Stuart was the very happy recipient of a substantial cheque from HM Revenue and Customs!
The mention of 'Research and Development' puts many businesses off. Many interpret the phrase as meaning that they have to be a research company, or maintain a big R&D team. If you innovate and improve the way something works in your business, and the outcome lacked 'certainty' in the beginning, you may qualify.
Icarus was established in 1998 by Stuart Haycock and has grown to a team of eighteen. Based in Southend-on-Sea the company specialise in the Aviation and Aerospace industry sector.
They are acknowledged as the world's leading supplier of training evacuation systems for airline cabin crews. Products include training slides for descent training, slide-rafts for wet training and an extensive range of accessories to help in the inflation and management of the evacuation equipment. With over 120 systems deployed across the globe they have an impressive client list that includes a number of national airlines.
In addition to the training evacuation systems Icarus also design, develop and manufacture technical inflatable training products for the military under the Airborne Industries brand name. Airborne's product portfolio includes tethered helium balloons, parachutist training balloons and inflatable targets and decoys.
The majority of the company's clients require bespoke solutions that are guaranteed to perform consistently and reliably in highly demanding training environments. The industry is so specialised that there can be a disparity between a client's real understanding of their requirements and the impact that the law of physics has on achieving their goals!
The design of a descent slide for an airline will have to take into consideration many variables - the specific type of aircraft being used for the training, the training environment, training programme and type of simulator installation. What seems like a simple product is in reality quite a complex project requiring a high level of knowledge and expertise.
Quality assurance is crucial in the aviation and aerospace industry. The company is accredited with ISO 9001 – 2008 certification and their products have to meet the operational requirements of regulatory authorities as well as the stringent Health and Safety criteria of training facilities.
Product testing is a fundamental element of the product development process. The design team and engineers will work their way through a myriad of "what if" scenarios to ensure compliance and performance are maximised.
Icarus employs a highly skilled team who are accomplished in the use of leading edge Computer Aided Design (CAD) software and fabric welding technology. Almost every project involves developing a unique solution for the client. A considerable amount of employee costs relate to the Research and Development activities associated with designing a cost effective, timely, bespoke solution.
The aviation and aerospace markets lead the way in the adoption of new technology. In order to ensure that they are not left behind Icarus face the challenge of constantly developing new products, improving existing products and looking for new markets for inflatables such as flood control and surveillance. This strategy helps to diversify their commercial risk.
Icarus's accountant were aware that the company were undertaking extensive Research and Development activities and felt that their needs could be served most effectively by working with an R & D Tax Credit specialist. They had experienced the quality of Fiscale's work with another client and were happy to refer Icarus.
After two phone calls to confirm eligibility and the scope of the Research and Development activities taking place an initial meeting was arranged. The first meeting lasted for three hours during which time Fiscale's Technical Director, Stephen Bunting, reviewed the extensive product development undertaken by Icarus with Operations Director Stuart Haycock.
Following the meeting Stuart was tasked with collating detailed financial information relating to the elements of the different projects identified as qualifying activities. A further two hour meeting took place to clarify the information gathered to enable Stephen to draft the preliminary copy of the report. This was sent over to Icarus for approval and sign off before being submitted to the HM Revenue and Customs (HMRC) R&D Tax Credits team in Leicester.
The initial meeting with Icarus took place in December 2014 and the first cheque from HMRC was received at the beginning of March 2015. Stuart was delighted with the amount received and had not anticipated that the R & D Tax Credit scheme could prove so beneficial to the company.
"Stephen from Fiscale is certainly an expert in his field. He was able to identify the elements of our work that qualified for R&D Tax Credit. Fiscale made the process about as painless as it can be. They offered excellent guidance on how to refine our accounting structure and record keeping so that our data is now organised and future claims will be much easier to process.
We did have to provide quite detailed financial information but the size of the cheque received from HMRC has certainly compensated for our time and of course this will not be a one off claim.
Going forward Icarus will continue to work with Fiscale to ensure that we maximise the benefits from the R&D Tax Credit scheme. I just wish we had become involved with Fiscale earlier!"
Stuart Haycock, Operations Director of Icarus Training Systems Ltd
The receipt of a cheque from HMRC is not the end of the story. Fiscale will continue to work with Icarus to support them with future R&D Tax Credit claims. Product development is a key driver at the company. Developing new and unique products is a regular occurrence and sometimes it takes an outsiders perspective to acknowledge the level of expertise that is being used on a daily basis. Regular review meetings with Fiscale will ensure that Icarus do not miss out on this valuable income stream in the future.
Icarus will be using R&D Tax Credit to support further development in the company and to explore new opportunities and markets for their amazing products.