R&D Tax credits for software development
The software and IT industry is a progressive one that is always changing and developing, with professional software companies frequently seeking ways to improve and advance in technology. However, many of these companies are not aware of – and are missing out on – R&D tax credits which can assist in funding and resources for their research and development projects.
Welcome Cash Flow
For companies invested in R&D Software Development, these funds can help with the improvement and depth of your research projects. Not only this, they can also bring welcome cash flow to further enhance your business offering in addition to helping you keep pace or advance beyond your competitors.
Despite appearing daunting, finding out if your company is eligible for R&D tax credits is relatively straightforward. HMRC’s guidance is intentionally broad, stating that qualifying work is any that ‘seeks to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty.’
As such, investigating the eligibility of a project is worthwhile and can offer a substantial injection of cash into your business, enabling ongoing R&D activity to continue.
How Much Might I Be Entitled To?
R&D tax credits for software development firms and other SMEs were introduced in 2000, with a separate scheme existing for larger companies. Although the past few years has seen an increase in R&D tax credit claims by businesses in a range of sectors, awareness of the scheme is still limited.
The average claim made in the UK for 2015-2016, however, was £61,514 – a solid incentive for companies that may be eligible to take the plunge and make a claim. The SME scheme offers a generous rebate of 26% on R&D expenditure to successful companies, and up to 33% to struggling businesses.
Whether you are a large or small company, there are question you can ask to determine whether you qualify for R&D Software Development tax credits. For example, are you working on an innovative project for which extensive research is required? Are you in the process of developing new technologies, designs, solutions or protocols?
Why R&D Software Development?
As well as the initial benefits such as the funding, R&D Software Development is also beneficial in a multitude of business aspects. It can help to increase your business’s market value, it can help to improve both your business and products’ software and can assist you in becoming one of the more competitive and innovative companies in your market.
This extra financial support can help give you the time and resources to develop your projects freely without the worry of budget limitations or extensive losses. It may also cement the opportunity for another year’s operation – even growth.
R&D Software Development tax credits could be the solution you are looking for and form the catalyst for your company making a difference in this ever-changing and developing technological market. To find out more about your eligibility and how to claim, speak to a professional R&D tax advisor.