We’re a Professional Firm and we paid a subcontractor to develop an IT solution for us. Can we claim R&D Tax Credits?
Date: 30th November 2016
You don’t have to be a technical business to be eligible for an R&D Tax rebate or credit.
You could be a Debt Collector or a Bailiff Firm or an Accountant or a Solicitor or an Insurance Broker……but if you have commissioned a subcontractor to develop a unique IT, internet or intranet solution to improve your processes, then you may well qualify for a tax rebate.
The HMRC rules are clear. For a R&D Tax Credit claim, the following should apply:
- You own the process and have asked a subcontractor to develop it for you.
- In your view it is an advance on other IT based solutions.
- The solution required development and there were initially some uncertainties to overcome (almost certainly the case with a new development).
- You can claim up to 65% of the subcontractors costs to develop your solution and the best way to check this out is to ask an R&D Tax specialist. A good one will not charge for the initial advice.
They earn their fee by writing the Technical Justification which accompanies the claim, normally submitted by your own Accountant. Overall, it shouldn’t cost you more than 18% of the successful claim value.
The good news is that you can claim for work done up to two full tax years ago.
The even better news is that HMRC will process your claim, usually within 28 days, and issue a cheque very shortly after that.
You don’t need to be a technical business to claim R&D Tax Credits. You can claim for IT solutions
Jaime Lumsden, Director