R&D Tax reliefs: An extra £270k for software development company

The Problem

We were approached by a leading Channel Marketing and Management Automation software development company in relation to their R&D claim. The Financial controller believed that they were not getting the right support from their existing advisors, meaning that they were under claiming R&D tax reliefs.

The company employs several full time software developers, and also use a third party firm of developers in order to keep ahead of competition through innovation. They developed platforms for several multinational companies, and in order to maintain these relationships, as well as forge new ones, it was vital that the company employed a continuous development plan to create software that did not exist in the market.

The Solution

The previous R&D claim was not picking up several qualifying projects, as well as not including some of the qualifying subcontractor costs. Given that the company uses a timesheet system (for both employees and subcontractors), we were able to analyse the data in detail to produce an accurate and robust claim. This extra analysis enabled us to uncover significant previously unclaimed R&D spend.

We also discussed the precise technological advancements in the software with the key developers in order to pick up all projects that met the definition of R&D for tax purposes, as well as exclude any projects that did not qualify for R&D tax reliefs. This took the burden of the claim away from the finance team.

The end result was a repayable tax credit more than three times the size of the previous claim, from £130k to over £400k

The financial controller said:

“The approach with our previous advisors involved us writing our R&D claims report ourselves and submitting it to them for inclusion in the tax return. We didn’t fully understand the breadth of HMRC’s definition of R&D, so were underselling ourselves in terms of the R&D we were actually carrying out. Wilson Partners took this job away from us and ensured that the claim was maximised, whilst being tax compliant.”

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