R&D Tax Relief on software projects
Digital businesses are melting pots of innovation, whether through problem solving or the creation of new products or processes. Projects involving software development often qualify for R&D tax relief, provided they meet HMRC’s conditions of qualifying activity.
These conditions are reasonably broad, and you may have already completed software projects that qualify.
- Firstly, the R&D relating to the project must have attempted to achieve an overall advance, or improved knowledge and capability, in computer science or IT
- It needs to be an overall advance in technology, not just advancing a company’s own knowledge or systems
- The R&D should extend the baseline of the existing technology beyond its current capabilities
- Your project must have attempted to overcome technological or scientific uncertainty
- The project must go beyond analysis, copying or adaptation of existing software products or processes
- And your project should not have been easily worked out by a competent professional in the field.