Tax refunds are available through R&D for New Services, Process Improvements Automation of Service provision and even in some cases through the Analysis of Human Behaviours.
A common misconception is that R&D tend to only be applicable to tangible technologies and software development, however, we’ve proved time after time that this isn’t necessarily the case.
What you need to know:
Can I claim if the work was done for a client engagement?
Many professional services firms are reluctant to claim for work which has been undertaken on a client engagement – feeling that somehow the work cannot be legitimately claimed if paid for or subsidised by an end client.
As a general rule – if your end client is LARGE ( > 500 employees) then you CAN claim but only at the LARGE/RDEC scheme rates, which are much less generous than the SME scheme rates.
If your end client is not LARGE then the process of whether you can or cannot claim is somewhat more complex and depends on specific details of the contractual relationship between you and your client.
Differentiating between R&D and routine professional service work
The most challenging aspect of professional services claims is differentiating between the day to day (albeit highly skilled) work and work that leads to an advance in the field.
If we consider architects as an example – each new client engagement will require bespoke complex architectural work – but is that qualifying R&D?
We focus on trying to differentiate between ‘design’ work and ‘development’ work.
An architect may complete a prize winning new design of a building but if it uses known materials, known methods of structural engineering support and known methods of fabrication then it is unlikely to be considered to have made the necessary advance in science.
However, if an architect designs a very plain standard building but uses a new lightweight material for which they have to devise a technological solution for preventing a known problem of moisture ingression into the material and has to undertake some experimentation with different shapes and sizes of the material in a scale mock-up of the building – then that would be a good candidate for whether a project contains qualifying R&D.
Whilst certainly not the definitive test for determining eligibility of a project – a good filter to select potential projects for more detailed analysis is whether the work done on a project has potential application elsewhere in the future. If a soil composition for a new building structure is such that a geotechnical engineer has to develop a new soil compactness test measurement then it is conceivable that the test would be re-used on another similar project in the future, then such a project would be worth of more detailed investigation for possible qualifying R&D.
- Product Design and Development companies
- Product Testing Houses
- TV Production Companies
- Geotechnical Services
- IT and Software Development Services