Traditionally R&D tax credits have been associated with those in the technology sector; yet any business from any sector may be eligible.
About the company
Art&Graft is a prime example.
Art&Graft is an award-winning design and animation production studio based in London. The team of highly skilled design specialists have worked on projects for The National Lottery, Virgin Atlantic and Nationwide – to name but a few. They may not seem your typical company to be eligible for R&D tax credits, but after speaking to them we recognised that some of their innovative work may qualify.
The Challenge & Solution
After an initial discussion with our R&D tax specialist and partner, Neill Staff, it was clear that Art&Graft was carrying out qualifying R&D activities. The director, Mike Moloney explained that there was an ongoing internal programme to continually test, develop and create new visual language system outputs, and that since the company’s launch in 2010, Art&Graft had invested economic resources to the pursuit of discovering new creative approaches through the considered and unique combination of technical animation procedures, software and rendering processes.
In order to establish what the qualifying R&D costs were, it was necessary to understand that, as a design and animation studio, Art&Graft combines both a creative and technical skill set, and that the company is in a constant process of research and development to push its technological capabilities within the studio. Key areas of research focused on the industry-wide trend toward integration of technical and creative approaches for audience engagement across multiple visual platforms with the intention to intelligently combine these technical approaches to develop new and unique visual aesthetics.
Qualifying projects and costs
Neill and Mike identified five key research and development areas inter-connected within the realm of 3D visuals, including character animation pipeline, modelling, texturing, rigging and the 3D rendering process. There were also two longer term projects which involved research and development undertaken in the field of 3D simulations and 3D particle systems. After identifying the specific projects that qualified for R&D, it was then a case of Neill and Mike identifying the qualifying R&D expenditure.
Neill guided the company through the R&D claim process and was able to claim over £70,000 in tax credit repayments. For a hi-tech design company of this calibre, this had a huge positive impact on their cash flow and meant the company could take on even more projects.