Software development projects that may qualify for R&D tax relief include:
- new forms of software or new functionality for existing R&D projects;
- tools to extend the functionality of application software programs or of an operating system;
- extensions to database software, programming languages, or operating systems;
- software development tools, such as tools to port data across platforms, tools for image processing or character recognition;
- novel data management techniques, such as new object representations and new data structures;
- innovative methods of capturing, transmitting, manipulating, and protecting data;
- means of integrating hardware and software platforms.
What kind of activities are eligible in a R&D Tax Credit software claim?
- defining technical objectives;
- identifying uncertainties;
- feasibility studies;
- reviewing new and competing technologies;
- analysing, designing and developing the technology;
- producing technical specification or other documents to explain and support the R&D project and advancement;
- testing the product, process or software;
- planning and managing projects
- administration, finance, and personnel services specifically required to support R&D activities;
- training to support R&D.
What R&D expenditure can be claimed for software projects?
- 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.
- Utilities & Consumables – Water, fuel, power and material used in the project.
- Prototypes – Produced for R&D purposes