R&D in Software & I.T.

The software and IT sector is central to technological innovation, encompassing a wide range of activities that qualify for R&D tax credits. Key areas include AI, machine learning, cloud technologies, and cybersecurity.

In recent times, the R&D tax relief landscape has changed dramatically and more specifically, how R&D tax relief submissions are reviewed by HMRC where companies are claiming for an advance within the field of Software/IT. These are based on several factors including outdated baseline statements, technological challenges vs technological uncertainties, feature-set advancements made rather than extending underpinning technology capability or knowledge etc. Alongside these, our consultants who specialise within the software industry can help steer claimant companies in the right direction to determine their eligibility and compliant activities. 

To provide further oversight within software R&D, several sub fields may qualify. AI and machine learning are paramount, significantly enhancing data analytics, problem-solving, and automation capabilities. These technologies enable more intelligent and efficient processing of vast data sets, leading to better decision-making and operational improvements. Cloud technologies are another critical focus, advancing the capabilities of data storage, management, and processing. This progression supports the growing need for scalable, flexible, and efficient data-handling solutions. Cybersecurity remains a top priority, with ongoing efforts to develop robust encryption methods and secure communication solutions to protect sensitive information from increasing cyber threats. Additionally, software integration is a key trend, aimed at creating systems that allow for seamless data integration and management, ensuring smooth and efficient operations across different platforms and applications. These trends underscore the sector's commitment to continuous innovation and the development of cutting-edge solutions to meet the evolving technological landscape.

With all R&D activities, it is important to understand when the R&D takes place. As per the DSIT guidelines, R&D starts when the team identify the scientific or technological uncertainty as per para 13 or 14.

Examples of potential R&D activities

-        Developing new software frameworks to enhance the capability of application software programs or operating systems.

-        Development data frameworks for capturing, transmitting, manipulating, and protecting data.

-        Extending capabilities of database software, programming languages, or operating systems.

-        Designing software development tools for porting data across platforms.

-        Developing means to integrate hardware and software platforms effectively.

How We Can Help:

At Westlock Partners, our experts help software and technology firms identify eligible R&D activities and maximise their R&D tax credits. Click below to schedule an initial exploratory meeting with our Head of Innovative & Emerging Technologies Advisory to discuss how we can support your R&D tax relief claim.