Specialist R&D Tax & Grant Funding Advisors


Making a breakthrough in the computer science or IT world? Companies of all sizes - from software developers to businesses with an internal tech division – reap rewards for their innovative achievements via R&D tax credits, so don't miss out!

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Guide Overview

From creating algorithms to developing software applications, your business could make significant tax savings with R&D tax credits. Read on for a breakdown of the basic sections you need to know about in order to gain an understanding of how this relief may apply and benefit your technology-focused enterprise.

R&D Tax Credits for software development explained

Whether you’re a software development company or a business that develops software in-house, if you’re making an advancement in computer science or information technology, you could be eligible for R&D tax relief.

You might be trying to resolve a scientific or technological challenge or uncertainty. You might be developing new products, processes, architecture techniques or services, or you might just be looking to improve existing ones.

Software development is continually evolving and establishing whether an advance in knowledge or capability is actually an overall advance can be difficult in such a fast-moving industry. Projects which were seeking such advances in previous years and were considered eligible for R&D Tax relief may now not qualify as technological capabilities increased over time as the industry moves forward.

This is why it's important to speak to an expert advisor who can help you assess your development projects.

R&D Tax Credits for software development explained
Is your software project eligible for an R&D claim?

Is your software project eligible for an R&D claim?

Your software development project doesn’t have to be successful to qualify for R&D tax relief. But it does need to meet two criteria:

1. Does your project seek to create an advance in science or technology?

To meet this criterion, you must prove you’re doing at least one of the following:

  • Looking to achieve something that hasn’t been done before
  • Trying to overcome constraints that haven’t been faced before
  • Using methods that haven’t been tried before

2. Is your project overcoming a scientific or technological uncertainty?

When submitting an R&D claim for your software project, you need to prove to HMRC that the objective of your project is to overcome uncertainty at a technology level, and you need to show evidence that the uncertainty was not immediately resolvable.

“Myriad Associates have provided us with an excellent service over the past 5 years, working with us to prepare our submission for R&D tax relief. They have a high level of understanding of our industry and technologies, as well as the relevant tax rules.”

Peter Hinchliffe

Strategy Director at NXT Digital Solutions

How can we help with your software R&D claim?

Let us be your guide on the journey to R&D tax credit success. Our team of specialist experts has extensive knowledge and experience in dealing with R&D tax credit claims, giving you a greater chance at profiting from this valuable scheme.

With thorough analysis of every project our professionals will analyse your project from a scientific & technological perspective to ensure it qualifies under the scheme's ever-changing guidelines before proceeding any further.

Get in touch today!
R&D Tax Credits
  • As experts in R&D tax services, we pride ourselves on being able to confidently deliver value and affordability for our clients. We offer a success fee-only basis platform that ensures satisfaction with every claim!
  • Let us take the reins of your R&D tax claim and make it as effortless as possible. Our expertise ensures a smooth progression from start to finish, with minimal disruption to you!
  • Our team of savvy experts can maximise your qualifying projects and expenses, from the obvious to those that are often overlooked. With years of experience in this field, we  cover all bases.

Our approach

  • For over two decades, we have proudly offered our clients expert guidance on R&D tax credit claim strategies. Our experience and continued success rate speaks volumes to the quality of service that you can expect when working with us.
  • Our clients trust and value our expertise, which we are proud to apply in order to give them the insight they need for success.
  • Our team has achieved extraordinary success in reclaiming R&D tax credits previously missed by our clients. We are proud to have helped them maximise their financial savings and receive the benefits they deserve!
  • Our team of specialists are well-equipped to provide reliable research and development solutions for an array of industries, ranging from engineering & manufacturing, pharmaceuticals and software through to digital design and immersive technologies. We have also supplied high quality claims for the food & beverage sector.
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Frequently asked questions

The list of software projects that usually qualify for R&D tax relief is broad. Some common examples of the types of software development projects that usually qualify for R&D tax relief include: 

  • Software for new projects, or new functionality for existing R&D projects 
  • Tools to extend the functionality of application software programs or of an operating system 
  • Making extensions to database software, programming languages, or operating systems Software development tools, such as tools to port data across platforms, tools for image processing or character recognition 
  • Novel data management techniques, such as new object representations and new data structures 
  • Innovative methods of capturing, transmitting, manipulating, and protecting data 
  • Software to run new computer hardware 
  • Software to run on devices with pre-installed operating systems, such as handheld GPS, mobile phones, and tablets  
  • Means of integrating hardware and software platforms 

The following tasks are usually considered eligible for software R&D tax credits:  

  • Defining technical objectives 
  • Identifying uncertainties 
  • Feasibility studies 
  • Reviewing new and competing technologies  
  • Analysing, designing and developing the technology  
  • Producing technical specification or other documents to explain and support the R&D project and advancement  
  • Testing the product, process or software  
  • Planning and managing projects 
  • Indirect activities that are specifically required to support R&D activities may also qualify for R&D tax relief (e.g. administration, finance, personnel and training). 

When submitting an R&D tax relief claim for your software project, you can normally claim for the following expenses:     

  • Staff costs (Staff costs include gross pay, employer's NI and employer's pension contributions)  
  • Agency workers, subcontractors or freelancers 
  • Software licenses  
  • Disposable items such as heat and light, and materials and equipment used in, or transformed by, the R&D process 
  • Cloud computing and data storage and handling from April 2023.

There are two R&D Schemes you can apply for R&D tax credits under.   

1. SME scheme 

This scheme is used by companies that have:  

  • Less than 500 members of staff 
  • Have a turnover of under €100m 
  • Have a balance sheet that’s under €86m 

The SME scheme allows profitable organisations, that meet the above criteria, to deduct an extra 130% of their eligible R&D expenditure from their taxable profit. For businesses that have made a loss, a claim can be made that’s worth up to 14.5% of the surrenderable loss.  

2. The RDEC Scheme 

The RDEC scheme is usually used by larger companies (or by SMEs who have either received some kind of grant for the R&D work or where it has been subcontracted to them by a non-SME) that have:   

  • A staff headcount of over 500 
  • A turnover of €100m or more 
  • At least €86m in gross assets 

With the RDEC scheme, companies can expect a claim value of up to 9.72% of their eligible expenditure. 

Having a clear understanding of the R&D legislation surrounding software development is key to making a successful R&D claim.  

To qualify for R&D tax credits, your company must pay UK corporation tax and it should be funding the software development project you’re putting a claim in for.  

Work out which activities should be included in your R&D tax claim and attribute the correct amount of time and expense to each one. Then, choose which scheme you want to apply under: the SME scheme or the RDEC scheme (see above). 

When determining if your company qualifies for a software R&D tax credit claim, just consider what advance your software project is making and what the technological uncertainties surrounding the project are.  

To avoid triggering an HMRC investigation check to make sure that your software project is eligible to receive R&D funding (see above).  

To make it easier to compile your R&D claim, add R&D tags into your source code and add detailed notes about specific R&D tasks and experimentations that have been done.  

To make sure your R&D claim is accepted by HMRC, write a solid technical narrative:  

  • Write from a technical perspective 
  • Keep it simple 
  • Avoid jargon  
  • Don’t be afraid to include details about field projects as it shows HMRC that your software project is hard to solve 

The process of claiming for software R&D tax credits can be complicated and difficult. So, contact the R&D tax credits team for help with maximising your R&D tax claim.

Your software development project doesn’t have to be pioneering or even successful to qualify for R&D tax relief. But it does need to meet two criteria:  

1. Does your project seek to create an advance in science or technology?  

To meet this criterion, you must prove you’re doing at least one of the following: 

  • Looking to achieve something that hasn’t been done before 
  • Trying to overcome constraints that haven’t been faced before  
  • Using methods that haven’t been tried before 

2. Is your project overcoming a scientific or technological uncertainty? 

When submitting an R&D claim for your software project, you need to prove to HMRC that the objective of your project is to overcome uncertainty at a technology level, and you need to show evidence that the uncertainty was not immediately resolvable. 

You can claim R&D tax relief for costs associated with your software project. These might include staff or subcontractor costs or even disposable items such as heat, light and power.  

An eligible software development project can be anything from integrating hardware and software platforms to building a tool for image processing.  

The types of activities you can claim R&D tax credits for range from conducting feasibility studies to testing products. 

To be eligible as qualifying R&D expenditure, expenditure must be allowable as a deduction in calculating the taxable profits of the company.

Capital expenditure is therefore excluded but could qualify for R&D Capital Allowances. However, if the expenditure is recognised as an intangible asset in the accounts relating to R&D revenue expenditure it will still be eligible for R&D tax relief.  

Does your business qualify?

Speak to our experts today to see if your software activities qualify.

Get in touch today!

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Is your business registered for Corporation Tax in the UK or are you a partnership with corporate owners?


Have you developed new or improved existing products, processes or services in the last 2 accounting periods?

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Have you incurred any R&D costs on staff, contractors and consumables?

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Does your business have fewer than 500 staff, and either: A turnover of no more than €100 million; or Gross assets of no more than €86 million?

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Sorry, you must be a UK limited company or be a Partnership with corporate owners to be eligible for R&D tax credits.

In order to qualify for R&D tax credits you must be seeking to advance science or technology within your industry. As you’ve not developed any new or improved any existing innovative tools, products or services, and not re-developed any existing products, processes or services in the last 2 years. It is unlikely you have any qualifying activity. If you’re unsure, email or call us and we’ll help clarify.

In order to claim R&D tax credits, you need to either employ staff or spend money on contractors, consumable items and other items. If you’re unsure, email or call us and we’ll help clarify.

Thanks for that!

Congrats!! Based on your previous answers, you will qualify for the SME scheme. If you’d like some help maximising and securing your claim, please email or call us.

Congrats!! Based on your previous answers, you will qualify for the RDEC scheme. If you’d like some help maximising and securing your claim, please email or call us.

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