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R&D Tax Credits for IT, Software & Gaming

Software development moves at an incredible pace — more so than any other industry. With businesses just like yours making new advances every day, your daily activity is likely rich in research and development (R&D).

Yet, IT, software and gaming businesses are still woefully underclaiming the R&D tax credits that they’re entitled to — or not even claiming at all.

R&D goings-on in your sector are more nuanced than most. In computer software, the advance sought to qualify for R&D tax relief is rarely expressed in the product.

The advance comes not from the application layer but the technology layer. The science of technology had to be advanced to develop the application that establishes R&D eligibility.

HMRC will look to see an advance in overall knowledge or capability against presently available knowledge and not just your company’s advancement. They’ll want to see software difficulties and challenges that a competent professional in the field has not yet overcome.

It’s not always easy to decipher which costs will attract R&D tax relief, which is where we come in to ensure nothing goes amiss. Even the smallest of software projects can yield tens of thousands of pounds in R&D tax credits.

Software projects that may qualify for R&D tax relief include:
  • Software code changes to implement an enterprise software application
  • Tools to extend the functionality of software / operating system
  • Extensions to database software, programming languages, or operating systems
  • Creation of software programming interfaces, tools, SDK’s or API’s
  • Innovative methods of capturing, transmitting, manipulating, and protecting data
  • Means of integrating hardware and software platforms
  • Complex algorithms, methodologies, computation or analytics

Software Case Studies

PowerChord — software

PowerChord — software

Ebix Europe – IT & software

Ebix Europe – IT & software

Lemongrass Consulting – IT & software

Lemongrass Consulting – IT & software

Pomerol Partners – Professional

Pomerol Partners – Professional

Photography – SpinMe

Photography – SpinMe

 

Interested in claiming R&D tax credits?

What activities can be included in a R&D project?

  • 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, service or software
  • Planning and managing projects
  • Administration, finance and personnel services specifically required to support R&D activities
  • Training to support R&D

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
  • Utilities & Consumables – Water, fuel, power and material used in the project
  • Prototypes – Produced for R&D purposes

About Easy R&D’s R&D tax credit claim process

Claiming R&D tax relief is a niche.

Here at Easy R&D, we’ll probe your company’s activities to reveal the true extent of your company’s R&D.

Averaging £54,000 per claim, we’re a business built around expert tax professionals, skilled technical report writers, and flawless processes to ensure your R&D claims are successful — with maximum return. You could even reduce your corporation tax bill to zero.

HMRC’s criteria for claiming is purposefully broad, so what qualifies may surprise you.

 

Interested in claiming R&D tax credits?