For those working within the Software industry, you will know that this is a challenging sector that often requires innovative solutions. As R&D activities go hand in hand with innovation, there is a clear link between R&D and the Software industry.
R&D tax credits for the Software industry are a great way to mitigate any losses when undertaking innovative and inventive solutions. There are a range of Software projects that can qualify for R&D tax credit claims, with the most common ones being; working with new or improved materials and new processes and techniques.
Software projects that may qualify for R&D tax relief include:
- Software to improve business efficiencies, operating, health and safety or product delivery;
- Improving clients on boarding, client journey, ordering systems, wastage reduction;
- Integrating all systems within a business to run as one, or;
- Software, coding, analytics to monitor business processes to further the business.
What activities can be included in a R&D project?
- Overcoming challenges and uncertainties;
- Designing and making products;
- Suggesting a more cost-effective process;
- Suggesting a more time-efficient process;
- Time spent researching and development of current projects;
- Seeking to improve processes, services, materials or devices;
- Production of prototypes or performance testing;
- Development of software or IT solutions;
- Investment in failed projects or developed products that are never launched/used;
- Efficiency of product, process or service, or;
- Employing any staff of a highly skilled background or with technical or scientific background.
What expenditure can be claimed for in a R&D project?
- Staff Costs – Employee costs (salary, national insurance and employer pension) are apportioned for their time spent on the R&D project plus any reimbursed associated business expenses;
- Software – Purchased for R&D purposes and costs apportioned for any subsequent use;
- Subcontracted R&D – You can claim 65% of what you paid your R&D subcontractor, or;
- Utilities & Consumables – Water, fuel, power and material used in the project.
- Prototypes – Produced for R&D purposes.