Research and Development (R&D) Tax Relief Claims: Focus on Software Development

Research and Development (R&D) Tax Relief Claims: Focus on Software Development

Software development is a significant sector for R&D with many projects qualifying for R&D tax relief. However, you don’t have to be a specialist software development company to qualify. Many companies in differing sectors may invest in developing their own in-house bespoke software and this development may also qualify for relief.

HMRC has published detailed guidance on how the definition of R&D for tax purposes applies specifically to software development. This new guidance removes outdated and generic examples to include more up-to-date case studies which demonstrate how R&D tax relief can apply in practice to software development. It paves the way for many more claims in this area.

We are specialists in this area – whilst you may not consider you would be eligible for R&D tax relief it is always worth checking the position with us.  The relief can provide valuable tax savings or a cash injection to qualifying companies. Your company could save up to £2,470 for each £10,000 of qualifying expenditure.

HMRC aims to process R&D tax relief claims within 28 days. Recently there have been lengthy delays to this turnaround time, but the good news is that HMRC is now taking action to reduce the delays by drafting in new staff to help process claims. This will come as welcome news to tech companies which rely on this generous tax relief to help fund new projects.

If you would like to learn more about Research and Development tax reliefs and how our specialist team can help with your claim please contact Lucy Creese – lucy.creese@kilsbywilliams.com