Case Study – Poultry Processing and Packaging

By Zeinab Ahmed-R&D Tax Consultant

Our client, a local family business and a leading poultry processing and packaging operation, received £113,000 from HMRC as a result of a successful claim for Research and Development (R&D) tax relief.

Historically a poultry cutting plant, the business has undergone a revolutionary transformation in the last few years moving away from providing local wholesalers and catering butchers and into the manufacture and assembly of ready-to-cook meals. The company considers diversification and flexibility to be key factors in the future success and growth of the business and as a result of securing contracts with some of the UK`s leading retailers and EU suppliers, the business now has the capacity to produce over 100,000 ready-to-cook meals each week!

R&D Qualifying Activity
As a highly progressive company with an innovative approach to its business, R and D Reclaims was instructed to explore their R&D activity over two open accounting periods. A technical consultation was carried out by our Tax Consultant Zeinab Ahmed, to evaluate the company’s processes and procedures and consequently, two potential projects were identified.

In line with the company`s ambition of diversifying into the ready-to-cook market, the company spent significant time and effort developing a unique style of Thai, Indian and Chinese meal kits. Whilst ready-to-cook meal kits are nothing new, the unique selling point (USP) of our client`s meal kits was that they contained authentic ingredients sourced from Thailand, India and China rather than sourced from the UK. Our client saw the inclusion of wholly authentic ingredients in their sauces as a real USP for the business and something that would distinguish it from its competitors.

They intended to create a range of well-known meal kits emanating from Thai, Indian and Chinese cuisine (for example, Chicken Jalfrezi, Thai Chicken Green Curry and Chinese Chicken Chow Mein) which are suitable for, and widely recognised by the Western palette. They also knew that including authentic ingredients would have a major impact on the taste profile of their meal kits and would render the taste of the meals unrecognisable to the Western consumer.

How to incorporate these authentic ingredients, without deviating from a recognisable taste profile was a significant technical challenge that our client was not able to overcome initially and thus led to time and money being spent on R&D activity.

Their investigations were ultimately successful and have led to our client adding authentic meal kits to their already successful range of products.

The company also developed a new range of shelf-ready storage solutions for their supermarket clients. A new design was requested to save time when packing shelves before the start of a shift. It was decided that an increase to the quantity of chicken stored on each individual shelf was needed. This presented a particular design engineering challenge for the company due to the multiple requirements of the storage – needing to be lightweight and easy to assemble whilst, at the same time, being robust and capable of holding a greater weight of chicken. Although at the outset our client was unable to identify a technological resolution to the problem, they worked to develop a solution and the outcome of the R&D project was successful.

Outcome
The client has managed to claim over £113,000 from HMRC by way of overpaid corporation tax.

An egg-cellent result!!

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