We have a significant number of clients drawn from within the precision engineering industry. The potential to claim R&D tax credit in this industry is not always obvious so companies are less likely to be benefiting. The case study below is fairly typical for this industry although the size and complexity of the parts being developed will vary as each company aims to have their own niche.
Precision Engineering Company
Example of a single project (in a year there could be well over 100 projects). One of our customers came to us for assistance with making a set of very small parts (seven in all) which are miniature connectors used on a piece of machinery. This example relates to one of the parts. They said they had made the parts in house on their CNC machines (which are machines we also have) and that there was no issue with the material or achieving dimensions but they felt that the production process could be improved and the part may be better suited to production on a different type of CNC machine, which we have and they don’t have.
Development activities involving R&D included:
The advance sought was to develop a production process to produce a very small part, less than a millimetre long, hollow, with a tiny hole in the middle, 4 slots at the front and a ‘clench’ at one end. The part needed to be capable of handling extreme loading from a spring in one area and the production process had to meet a tight cost margin.
We did not have a blueprint for making the part so there was technological uncertainty over the design and development of the production process, to make a part with the required features and size, while also being strong enough to withstand extreme loading, given the tiny size of the part.
- As the part is so small a lot of trial and error was involved to find a satisfactory production process.
- One of the problems we faced was in developing a workable order for the various production operations.
- We found that getting the four slots to line up, then closing down the clench end from the front, pushed swaf (minute particles only seen on a microscope) back inside the part and trapped them there.
- There were also burrs which we had to eliminate - we had trouble seeing without using a microscope.
- The part is made out of copper, which is hazardous, so that added an extra layer of complexity as oils used must be kept separate and we had to protect staff to ensure no ingestion of particles.
We were successful in developing a production process to make the part to a quality and price point that was satisfactory.
What was the financial benefit?
- We claim year on year as we are constantly undertaking similar process development projects.
- Our total claim value averages at around £36,000 per year.
Are you ready to find out if you qualify or how much your R&D claims could be worth?