A retrofit solution for a range of switchboards
How Electrical Distribution Systems used R&D tax credits to double their R&D spend and be “more risk-taking” – winning their largest contract yet.
Electrical Distribution Systems
Electrical Distribution Systems was founded by Andrew Porteous and Edward Bradley in 2007. Initially, they serviced and maintained electrical switchboards. This normally requires replacing the entire circuit breaker or even the switchboard panel because parts and servicing have been discontinued. This can take 12 hours or more per circuit breaker and a whole week for switchboard panels.
This isn’t just inefficient for their business. It results in significant power downtime for UK businesses and keeps our favourite pubs, theme parks and entertainment out of action too.
Andrew and Eddie quickly realised that there was a gap in the market for a retrofit solution where they could replace old switches with modern ones, taking just one hour instead of 12.
The problems
“You get to a point of no return”
Electrical Distribution Solutions have always had an entrepreneurial approach from the outset, taking on calculated risks. But this can come at a significant loss and they lost 40k on one design where the tolerances were too fine to work.
As Andrew explains, “It’s like a plane taking off. You get to a point of no return. You can’t just say, “ I’ll throw 5k at it and have a look.” You have to go the whole hog to prove it. Even with the best CAD model, it’s only theory until you’ve physically built one.
Looking into R&D tax credits was too taxing
After Electrical Distribution Solutions’ first years of investing significantly in R&D their accountant advised them to speak to a specialist as they didn’t have the in-house expertise. However, Andrew put it off due to being too busy and because he “dreaded the endless sales calls of people wanting money upfront to save the world.”
The solution
Andrew met with Invo after a conversation with a Joint Venture contact, who suggested he speak with them.
“The minute I met Invo I knew that they were just real. They weren’t pushy or showy, but real with confidence. They explained everything simply to me. They didn’t overcomplicate it or over-promise, saying we can definitely get you this or that. Instead, they told me to send them some information and they would look at it and give an initial assessment before we signed.”
Electrical Distribution Services adopted its ingrained learning curve mindset and worked with Invo to optimise their R&D tax credits strategy. This has included:
The results
Electrical Distribution Systems first started working with Invo in January 2019, who helped them claim retrospectively for the accounting periods ending January 2018 and January 2019. Since taking a proactive approach they have been more risk-taking as they know that they will be eligible in advance for cash back, even if unsuccessful.
As Andrew says, “You can be more risk-taking. Not ridiculously so, but now I know I can claim around 25% back even for unsuccessful projects, I’ve doubled my R&D spend and brought projects forwards – one of which led to my largest contract yet.”
In the middle of the 2020 COVID-19 lockdown, Electrical Distribution Solutions secured its largest contract to date to supply a retrofit design for a large shipping yard in Liverpool. Someone who had worked for a company they’d devised a retrofit solution wanted to use them after he’d moved onto another consultancy. This only came about because they’d brought the previous project forward with the extra cash flow from R&D tax credits.