• Tim Johnson

Finding R&D Tax Relief in Software

Updated: Feb 16

Normally, when it comes to software, R&D is found in developing new techniques for building software and new software builds themselves – so your software development businesses. However, customisation of software to fit a business’s needs WILL also qualify where technological advancement has been made for the industry. This takes R&D projects beyond the software sector, giving scope to every industry.


AM I ELIGIBLE TO MAKE A R&D CLAIM?


The key questions to ask yourself for any software projects are:


Have you gone beyond “the norm” within your industry?

This could be using new techniques or re-thinking how something can be achieved because you were previously controlled by standard methods. For example, the development of software capability to improve a system, enabling existing technologies to work together. Have you then experienced technical uncertainties and challenges in achieving what you have set out to do?


Did you know how you were going to achieve the end goal when you started? Or was it uncertain because of the new or different way you were approaching it? It must not have been simply adapted from freely available knowledge.

R&D SOFTWARE PROJECTS

Here are some examples of software projects that qualify for R&D Tax Relief:


• new software projects, or new functionality for existing R&D projects • methods for integrating hardware and software platform • development to increase the functionality of software programs or of an operating system • innovative software development tools • new data management techniques • methods of obtaining, transferring, securing and manipulating data • software to operate new computer hardware • software to operate on devices like mobile phones & tablets that have operating systems pre-installed


CASE STUDY: Academic software

Our client continued development of an existing academic software application for students to access software across any device, from any location. Costs claimed were predominantly for professional staff, subcontracted developers and software licenses.

Claim size £75K Corporation Tax Reduction from HMRC.


CASE STUDY: Catering & Hospitality Software

Our client invested in the development of a web and mobile application for a digital menu, ordering, and marketing platform. Costs claimed were predominantly for subcontracted developers, cost of supplies and software licenses.

Claim size £8K cash refund from HMRC.


CASE STUDY: Restaurant & Takeaway Software

Our client developed an application to consolidate social media and marketing platforms within the restaurant and takeaway industry. Costs claimed were predominantly for subcontracted developers.

Claim size £35K Corporation Tax Reduction from HMRC.


CASE STUDY: Staff & Recruitment (indirect)

Our client developed existing software systems to advance the insight and operations of the business. Costs claimed were predominantly for professional staff and subcontracted developers.

Claim size £7K cash refund from HMRC.


CASE STUDY: E-commerce (indirect)

Our client an e-commerce retailer, developed a specialist shipping integration software. Costs claimed were predominantly for professional staff and subcontracted developers.

Claim size £7K cash refund from HMRC.


For DTX’ers using Radish Tax from the Diagnostax ecosystem, you can get your hands on a R&D Software Projects document to use with your clients, just drop us an email at marketing@diagnostax.co.uk and we’ll make sure you get this. If you have a client you’d like to discuss, don’t hesitate to reach out.

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