New research shows that more than 90% of tech firms have developed new products, services or business processes in the last two years, meaning that they could be eligible for valuable R&D tax credits.
Software developers work in a sector which rests upon constant innovation. For developers, the clue is in the name. Tasked with developing new functions, systems and solutions, virtually everything they do could be classed as research and development (R&D) according to HMRC’s definition.
Yet two fifths of these same potentially eligible firms have never made an R&D tax credit claim meaning they are missing out on tens, even hundreds, of thousands of pounds each year that could be reinvested in their businesses.
The average value of a single R&D tax relief claim among software developers is a massive £56,000, which would make a huge difference to most companies’ annual revenue. Reinvested in the company, this money could fuel further growth and innovation.
Many developers, like other tech businesses, are failing to claim because many do not realise they are eligible for this form of tax relief. People across all sectors still think R&D applies only to scientists in white coats and simply do not associate it with their own work, however ground-breaking or inventive.
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Software development firms should cash in on R&D tax credits