warehouse of castings

Case study - Quality Castings

Quality Castings runs a purpose-built aluminium-alloy foundry. The company uses both gravity-die and air-set sand moulding processes to manufacture a wide range of tools for clients, including the MOD and those in the aerospace industry. Quality Castings has an in-house design team and a high standard of finishing and testing of products.

Sector: Engineering
Location: Bury St Edmunds

The Challenge

Foundries are often overlooked for R&D tax relief. Heavy industry can wrongfully be seen as lacking in the technical expertise that involves qualifying research and development. There can also be a perception that any R&D is covered by the fees, especially when the original designs for the product have been supplied by the customer.

In a modern foundry like Quality Castings, however, these are both misconceptions. Easy R&D’s challenge was to help MD Keith Bonsor and his team recognise that Quality Castings were doing innovative work and that this did not constitute normal commercial activity, as they had thought.  Keith was aware that his company frequently had to improve customers’ designs and invest in the time to test them after moulding: work that was rarely covered by their management fee. But he hadn’t realised that this work entitled them to R&D tax credits.

The Solution

Site visits were carried out at Quality Castings’ foundry to fully understand all the processes involved, from the reception of original designs, through founding to finishing and testing.

Easy R&D consultant Makhan Ram explained: ‘We were able to remind Keith that what he does is very clever. There are many unknowns and uncertainties in Quality Castings’ projects which they have to overcome. Every job will throw up fresh challenges and uncertainties. The designs they are given may not be practical, so they have to come up with the pattern themselves through sometimes extensive R&D. Then there are factors such as shrinkage: the cast product will shrink depending on the shape and thickness of the aluminium and it takes trial and error and the creation of prototypes to establish this.

‘In addition, they are the experts for certain applications, such as in their hybrid casting solutions and the passageway they develop to allow water to pass through the moulds. No one understands their processes better than they do and they can’t find solutions from outside the business: they have to find them through practical means on-site.’

Working closely with Keith and senior staff at Quality Castings, Makhan helped them identify every aspect of their R&D which would be eligible for tax relief. He then introduced them to Easy R&D’s user-friendly Claims Portal to submit the information. Easy R&D carried out the cost-based analysis and Report Writer was assigned to prepare the Technical Report needed to explain the costings to HMRC. We then submitted the claim on behalf of Quality Castings.

The Benefit

Quality Castings have been clients of Easy R&D for five years. The latest R&D tax credits rebate is being put to good use.

‘We’re using some of it in a new cooling tower for our sand foundry,’ said Keith Bonsor. ‘The water-cooling system has to be replaced every five years, which is quite a financial burden. It’s also going towards our IT costs, since we’ve just installed a new server.’

He said: ‘I tell them that the claims procedure is really straightforward with Easy R&D, so long as you keep on top of your projects and make notes of the work done and the time and money you’ve spent on it. I keep the details to the format Easy R&D have given me and I add them to your spreadsheets. My assistant finds the Claims Portal easy to use. The process isn’t time-consuming at all. It’s just a case of getting into the swing of it.’

He added: ‘The benefits are enormous. Every product we manufacture involves development and design and often a fair amount of research, too, on what will work best. It’s not uncommon for a customer to present us with a specification that simply won’t work. They have designers using CAD software who unfortunately have no idea of how to make the tool they’ve come up with. We have to point this out and then spend quite a lot of time on R&D to discover what will work.

‘You can’t really pass all that R&D time on to the customer. We do include a management fee in our quotes, but it rarely covers the actual time and money spent on a project. That’s why R&D tax credits are so important.’

I think Easy R&D are a tremendous company – the way you’ve helped me. You’re very professional and you make everything straightforward. I have already been happy to recommend you to a number of other businesses.

Keith BonsorManaging Director