Case study: Rega Research Limited
Founded by Roy Gandy in 1973, Rega Research is a dedicated British manufacturer of award-winning tonearms, turntables, and complete hi-fi systems.
With expert engineering at Rega’s heart, the company designs and assembles each of their products carefully by hand, in their custom-built factory in Southend-on-Sea.
Rega has grown steadily over the years, now employing over 140 people, and exporting to 46 different countries.
“People are better and quicker than machines. But if you don’t look after a machine then it doesn’t work properly, and people are exactly the same. It’s common sense.”
- Phil Freeman, CEO
For Rega Research, good business involves building strong, trusted human relationships. Unusually, the company chooses not to have formal contracts in place with their suppliers and customers, also preferring to conduct business in person.
Company founder Roy Gandy chose to work with Rickard Luckin (then Rickard Keen) after he personally researched and interviewed a number of accountancy firms.
“All the other firms Roy spoke with simply said ‘yes, we can do that’, but they didn’t ask any questions about our business,” explained John Tozer, Rega’s company accountant.
“Rickard Keen listened, asked the right questions, and never once boasted about being the best. But I’ve always been impressed with the service, and in fact Rickard Luckin are one of the best accountancy firms I’ve worked with.”
It was following advice from Rickard Luckin that Rega decided to apply for registered patents relating to their unique turntable parts. Turntables account for 60% of the products sold by Rega, and profits arising from the sale of patented parts are taxed at a lower corporation rate of 10%.
However, applying for patents was something of an alien concept for a company like Rega Research, which values open collaboration and learning opportunities.
“We’ve never been anxious about protecting anything we make,” explained Phil Freeman. “In fact, we’re even happy for other manufacturers to visit our factory and see exactly how we do things. But when we heard about the potential tax savings we could make, our ears pricked up!”
The next stage involved analysing Rega’s range of turntables, to decide which components could be eligible. Eventually, two were chosen, and the company put their application together in-house, only consulting a specialist lawyer at submission stage.
Part of the process also involved creating a detailed product spreadsheet, which involved manual calculations of sales and profit for each. Again, this was painstakingly put together by Rega in-house, for the team at Rickard Luckin to then apportion costs and calculate the potential tax savings.
Playing the long game
Almost five years after the initial application was submitted, both patents were granted. The early election in 2016 meant that in 2021, a Patent Box claim could be made in respect to all profits generated since 2016, which resulted in a tax saving of £679,000.
“We really appreciate the guidance offered by Rickard Luckin, along with their gentle nudges throughout the process!”
- John Tozer
Rega now plan to apply for two more patents, this time relating to other product areas. In keeping with their reputation for collaboration and openness, the company is very happy to share information about their process with anyone who might be interested.
For further information about Patent Box claims, please contact our team at Rickard Luckin via our online enquiry form .
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