R&D Tax Relief for website and app development
A common misconception when it comes to HMRC’s R&D Tax Relief scheme, is that the only type of computer science/IT (Information Technology) projects or activities that can be claimed for under the requisite legislation, are those that exist in the domain of what are thought of as more nascent or emergent technology types. Examples here being Artificial Intelligence (AI), machine/deep learning and the use of neural networks, blockchain etc. However, the good news is that this is not the case.
Can you claim R&D Tax Relief in website/app development?
With the scheme itself being sector agnostic in nature and applicable across all types of industries, the relevant tax legislation has been written to be all-encompassing and inclusive in nature. This means that any “project” that achieves/attempts to achieve an advance to the associated boundaries of science or technology, whilst encountering/overcoming associated scientific or technological uncertainties (challenges) can be claimed for.
Therefore, even within the scope of computer science/IT projects and activities, there are numerous subsectors from which qualifying claims can be made. One of these is website/web application (app) development.
Types of website/app projects that qualify
Within website/web app engineering, there are numerous types of projects that qualify for R&D tax relief. The most common of these are:
- Green field writing of a website/web app, from scratch, with proprietary code (HTML, JavaScript, or other core web programming languages, e.g., PHP, Python, C#, etc.) being written, appreciably enhancing, extending, or augmenting open-source or freely available web development frameworks or libraries
- Taking an out-of-the-box vendor-based or third-party web platform and performing palpable or significant technical enhancements, extensions, or augmentations to the same. This can take the form of creating new technical or functional capabilities to these tools and/or increasing the technical KPIs associated with them, e.g., making them faster; more secure; more scalable; allowing greater numbers of concurrent users; etc.
Overcoming technical challenges
With the above constituting activities that would fulfil an “advance” to the state of the art within the public domain, at the time of software engineering, it is then necessary, under the scheme, to encounter/overcome technical challenges. In this context, computer science/IT projects work well, as all software engineers and developers will appreciate that every IT project, no matter its size, consists of numerous iterations, with challenges/uncertainties encountered on a day-to-day basis. Common examples here would include limitations existing with technologies sought to be leveraged; performance/security/scalability issues; data format amalgamation, consolidation, and collation failures; etc.
Tracking developments to maximise the chance of an effective R&D claim
Our R&D Tax Relief specialists at Beavis Morgan advise all limited companies who have performed/are seeking to perform web development activities, no matter the industry sector in which they lie, to seek professional tax advice in acquiring the tax benefit that they are due from this government-backed scheme. This can be assisted by setting out to keep track, be it via paper-based models/prototypes or a project management software package, of the web development iterations and steps to be undertaken, as well as all the challenges that are faced or confronted, during a given web development project. Doing this will then make the process of claiming R&D tax relief, after the fact, as painless and straightforward a process as possible, in collaboration with the expert advice of an R&D tax advisor.
Consult an expert
Should you require any additional information about R&D Tax Relief, even outside of the IT sector, please contact Simon McCarthy via email at: simon.mccarthy@beavismorgan.com, or a member of the Beavis Morgan R&D Tax Advisory team, for a no-obligation consultancy discussion.