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R&D Tax Credit claims for software development

R&D Tax Credit claims for software development

17 August 2022

If you have had software developed for your unique business, then you may be entitled to claim R&D Tax Credits. We have often found that companies do not realise that a portion of their investment into bespoke software development activities and testing products can be recouped through the R&D Tax Credit. We have first-hand experience in helping companies in the UK access thousands of pounds of funding via this tax relief!

This is like free money back into your organisation – with no strings attached.

Software development is the most claimed for industry in R&D – which isn’t a surprise when technology is evolving at a rapid pace.

What is R&D Tax credit?

R&D Tax Credits are available for businesses that are working on innovative projects in science and technology. The tax credits are a government incentive designed to reward UK companies for investing in innovation.

For many businesses, these tax credits are a valuable source of cash when investing in research and development, hiring new staff and growing.

How do R&D Tax Credits work?

You can receive either a cash payment and/or a Corporation Tax reduction if you are spending your time, money and resources on innovation. If you have never claimed the Tax Credits previously – you can typically claim R&D tax relief for your last two completed accounting periods.

What software products are claimable?

The software projects must follow the BIS R&D Guidelines to identify as qualifying R&D work.

Some examples of projects that typically qualify for Research and Development Tax Credits:

  • Developing new platforms
  • Data analytics, processing and storage
  • Development of innovative algorithms
  • Internal software development of improvements
  • Building custom APIs
  • Cloud computer integrations and development
  • Development of augmented reality applications
  • Artificial intelligence (AI)
  • Mobile applications
  • Robotics
  • Machine Learning

What costs can you claim on R&D Tax Credits?

  • Staffing costs – wages & salaries processed through PAYE
  • Subcontractors
  • Agency staff
  • Externally provided workers
  • Consumables
  • Clinical trials
  • Software license fees
  • Utilities

What are the benefits of R&D Tax Credits?

R&D Tax Credits can transform your business. Not only will your business grow from the research and development – but a cash injection will help you to continue to evolve.

Get innovative!

We aren’t R&D Tax Credit experts, nor are we tax advisors. But, we have spent many years helping our clients develop new and innovative software products. In addition, we have worked closely with their Tax advisor to ensure they have a clear breakdown of the intricacy of the technology developed.

For more information or to get started, please contact the Code Galaxy team today.

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