In 2001, the UK government set up the R&D Tax Credits scheme to financially reward businesses that are investing in innovation and R&D activities.
It aims to make the UK the global leader in software development and innovative technologies and providing companies with a monetary incentive will give them the freedom to develop better Tech and innovate even more.
R&D tax credits – the bottom line
For every £100 you spend on R&D related activity, you could be reimbursed between £10-£30 in tax credits. That’s money which will go straight back into your account so that you can invest in more R&D, and your business can grow. But a vast number of Tech and software developers are missing out on this incredible opportunity because they don’t realise the work they are doing is eligible for the scheme. Or, if they do claim, they’re not claiming for everything they are entitled to.
There’s a lot of misunderstanding about R&D Tax Credits. That’s why we’re here to demystify the process and make sure you receive your maximum tax credit entitlement for the important, ground-breaking work your company is doing.
How does the R&D Tax Credits scheme relate to Tech?
If you’re working on a Tech project that’s seeking to advance overall knowledge or capability in computer science or information technology, you’re probably eligible for R&D Tax Credits.
Usually, the advance will be in the technology layer of your project – for example, an improvement in the design, algorithm or architecture of the software – so that your work ultimately furthers understanding of the technological science involved.
For your project to be eligible, you will have to show that the Tech you’re developing solves a legitimate technological problem. For example, by re-architecting the way disparate technologies integrate and communicate with each other; or improving the capabilities of a system by developing software to increase its speed. HMRC needs to see the problem you faced, how you overcame it, and what the end result was (it doesn’t matter if it was a failure, it’s still eligible).