R&D tax incentives and software
R&D tax relief provides vital funding for many software businesses. As an industry where R&D intensity is a given, it’s important you make the most of this powerful incentive. With the demand for quality developers at an all-time high, materials shortages impacting hardware development, and ferocious competition at every turn, you need an R&D tax consultancy that will secure maximum value for your software innovation.
If your business is involved in software development, there’s a good chance you could benefit significantly from research and development (R&D) tax credits. Taking advantage of the government’s R&D tax incentives for your software development can free you up to take more risks and grow your company in exciting ways.
What qualifies as R&D in software development?
The definition of R&D (for tax credits) is purposefully broad. If your software company is taking a risk by attempting to solve a scientific or technological challenge then you may be carrying out R&D. You might be developing a new product, process or service, or improving an existing one.
Here are some of the more common areas for qualifying software R&D:
- AI and Machine Learning
- Cloud computing
- Data processing and storage technologies
- IOT
- Augmented reality
- Robotics
Who qualifies for software development R&D tax relief?
Software is continually evolving e.g. a number of well-established branches continue to do so (AI, Cloud, mobile) and new applications for software are developed (e.g. robots, augmented reality, IoT and others yet to come).
Any company that is developing software could qualify for R&D tax relief:
- Software development companies: Typically, a business that has teams of software developers to support other businesses in their software projects.
- Software houses: May create and iterate software, provide Software as a Service (SaaS), business tools or enterprise resource planning (ERP) systems.
- Businesses that develop software in-house: Any business that performs a bespoke software development project.
What types of software development might qualify for R&D tax credits?
Resolving software difficulties and challenges that have not yet been overcome by a competent professional in the field. The knowledge gained must not have been simply adapted from freely available knowledge.
HMRC also needs to be able to see how the improvements to the software were made, which problems were faced, and how they were overcome.
How Planwey can help with your software R&D tax credit claim
Planweys’s combination of specialist technical expertise, tax knowledge and understanding of HMRC’s R&D tax credit claims process, means that we can maximise your software claim and ensure you receive the tax credits you are eligible to.
We are the largest specialist R&D tax credit consultancy in the UK. Our commitment to excellence means we’re the best. Don’t just take our word for it. We were named best independent consultancy firm at the Taxation Awards 2018 in recognition of our technical excellence and service innovation.
