Case study

Gateley Capitus achieves £550,000 in tax savings for warehouse and distribution client

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Gateley Capitus were engaged by a family-run client in Northern Ireland, who has been in business for over 50 years, to advise them on tax incentives that would be available on a recently designed, developed, and built 105,000ft2 distribution warehouse complete with a three-storey office block.

As part of this significant investment in the distribution warehouse, Gateley Capitus’ client identified that all mechanical and computer-based services and solutions would need to be state-of-the-art to ensure that the required productivity levels could be achieved. When investigated and trialled, the traditional solutions failed to provide either the solutions or performance levels needed which required Gateley Capitus’ client to invest in R&D activities to design, develop and integrate the required solutions to achieve the specified performance and productivity levels.

Having never claimed for R&D tax credits before, Gateley Capitus’ client needed to identify and work with an adviser who would be able to take ownership of the process and guide them efficiently, enabling them to focus on their core business activities.

After an initial introduction meeting to plan the claim delivery process in more detail, Gateley Capitus and their client’s technical teams met on-site to identify the qualifying activities and discuss those projects in more detail. The technical team at Gateley Capitus were then able to take the information and structure this into a technical report to justify the claim with HMRC. The qualifying financial information was collated by the Gateley Capitus team in conjunction with their client, with further discussions to determine the correct qualifying expenditure to calculate the claim benefit. This resulted in a corporation tax saving of approximately £50,000.

Having previously worked with this client, Gateley Capitus was instructed to advise on the availability of capital allowances for the development of their new distribution warehouse including a state-of-the-art mechanical installation.

Eligible services for capital allowances included mains switchgear, power and distribution, smoke and fire alarm, general and emergency lighting, access control, comfort cooling, ventilation and sanitaryware.

Using Gateley Capitus’ extensive experience of construction cost knowledge and valuation, accountancy skills analysis of the total development expenditure identified 32% of the works as qualifying for the plant and machinery allowances element of capital allowances, saving the client nearly £500,000 in corporation tax.

Utilising Gateley Capitus’ combined expertise resulted in their client achieving tax savings of approximately £550,000 across both R&D tax credits and capital allowances. By working with Gateley Capitus on both applications, the client avoided the need to engage with separate companies to achieve their correct entitlement of tax savings.