R&D Tax Credits for Software Service Companies

R&D Tax Credits for Software Service Companies
The software underpinning RDRelief was sold to one of the big-4 professional service firms in 2018. Consequently, the brand is no longer in operation.
  • R&D Tax Advisors are invited to find out more about the Inspired.tax claim preparation software.
  • Otherwise, please feel free to continue to browse this website for useful information regarding claiming R&D Tax Credits in the UK. However, beware that none of the information has been updated since 2018.

Background

Software Service companies are often engaged by companies in various industry sectors to undertake bespoke Software development owing to their technical expertise.
This technical expertise often leads to the software service companies working on projects that qualify for R&D Tax Credits. However, there is an added complexity for Small and Medium-sized companies, in that R&D funded by a large company cannot be included in a small company (SME) claim.

Eligibility Criteria

Main article: Eligibility Criteria
For any Software Development project to qualify for R&D Tax Credits, it must adhere the BEIS guidelines that define R&D for Tax Purposes.
These criteria dictate that:
See the R&D Tax Credits for Software Development page for more examples of software development activities that adhere to the R&D Tax Credits guidelines.

How were the Projects Funded?

Whether funding was received is one of the major concerns for small software service companies claiming R&D Tax Credits.
Companies can include funded projects in the RDEC regime (but not in the small company SME regime), which means that many service companies will have to apportion costs between the SME and RDEC regimes.

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