R&D Tax Credits for Technology and Software Companies

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Software and Technology R&D Tax Credit Expertise

Technology businesses often carry out qualifying R&D without realising it. At Cooden R&D, we help software companies, SaaS businesses, fintechs and technology providers identify eligible R&D activities and prepare robust claims.

We have supported businesses across the technology sector with R&D tax claims exceeding £30 million, including:

Teathers – FinTech

Supported the development of a SaaS investment platform by identifying qualifying R&D activities and helping secure £79k in R&D tax relief.

Fidel – Payment Technology

Helped identify qualifying R&D activity involved in complex payment integrations and API development, resulting in an R&D tax benefit of £50k+.

Icon Solutions – IT Consultancy

Supported an IT consultancy undertaking complex software development work, helping achieve an R&D tax benefit of £329k.

Milk Student Planners – EdTech

Helped an education technology business identify qualifying development activities involved in building and improving its digital platform.

Why this experience matters

R&D tax relief is not only for businesses creating brand-new technology. Software companies may qualify when they are overcoming technical challenges, testing new approaches or improving existing systems.

Our experience working with technology businesses means we understand the challenges involved in identifying, documenting and supporting software R&D claims.

What technology projects can qualify for R&D tax relief?

Technology and software businesses can undertake qualifying R&D across a wide range of projects. However, using advanced technology does not automatically make a project eligible. The key question is whether the project sought an advance in technology and involved attempts to resolve genuine technological uncertainty.

Projects that may qualify include:

Artificial intelligence and machine learning – Developing new algorithms, models, training techniques or AI systems where achieving the required technical performance involves genuine uncertainty.
Cloud computing – Developing new distributed architectures, infrastructure or methods of managing computing resources where established solutions cannot meet the required technical objectives.
Cybersecurity – Developing new approaches to threat detection, encryption, authentication, security monitoring or other technologies designed to overcome previously unresolved technical challenges.
FinTech – Developing new payment systems, fraud detection technology, financial algorithms, data-processing systems or other financial technologies involving technological uncertainty.
HealthTech / MedTech – Developing healthcare software, diagnostic systems, medical technology or data-processing solutions where technical challenges cannot readily be resolved using existing approaches.
Mobile applications – Developing technically complex mobile functionality, integrations or solutions where existing frameworks cannot readily deliver the required result.
SaaS development – Creating or substantially improving cloud-based platforms, particularly where there are challenges around scalability, performance, data processing or infrastructure.
Software development – Developing new software, algorithms, architectures or functionality where the technical solution could not readily be achieved using existing knowledge.
eCommerce – Developing sophisticated recommendation, search, personalisation, transaction or fulfilment technology where significant technical challenges need to be overcome.
CRM and ERP systems – Developing new data architectures, integrations, automation or processing technologies where the required technical solution is not readily available.

What technology work does not qualify for R&D tax relief?

Not all software and technology development qualifies for R&D tax relief. A project is more likely to qualify where it seeks an advance in technology and involves genuine attempts to resolve technological uncertainty that cannot readily be deduced by a competent professional.

Examples of work that would not normally qualify include:

Routine software development – Developing software using established technologies, frameworks and techniques without overcoming significant technological uncertainty.
Building a standard website – Creating a conventional website using established platforms, templates, content management systems or development methods.
Implementing an established software solution – Configuring or deploying existing software where the technical solution is already known.
Using an existing API – Integrating an established API where there is no technological uncertainty to resolve.
Routine maintenance – Carrying out standard bug fixes, technical support or maintenance where established approaches can resolve the issue.
Standard upgrades – Updating software, frameworks or infrastructure where the work does not involve resolving technological uncertainty.
Reconfiguring existing software – Changing settings, workflows or configurations to adapt an established system to business requirements.
Commercial activities – Sales, marketing, business development and other activities that do not contribute to resolving technological uncertainty.

Examples of Technology R&D Activities That May Qualify for Tax Relief

Technology area	Examples of potential R&D activity
Artificial intelligence & machine learning	Developing AI systems, automation tools or data models where experimentation and technical problem-solving are required.
APIs & system integrations	Building complex integrations where existing solutions are unsuitable and new technical approaches are needed.
Cloud infrastructure & scalability	Developing new approaches to improve system performance, scalability, reliability or security where technical uncertainties exist.
Cybersecurity solutions	Creating new methods to protect systems, data and users from evolving technical threats.
Data platforms & analytics	Developing solutions to process, manage or analyse complex datasets where existing approaches are insufficient.
FinTech & digital platforms	Building payment systems, financial applications or digital platforms involving complex technical development challenges.
Software & SaaS development	Creating new platforms, applications or features where technical challenges need to be investigated and resolved.

Technology & Software FAQs

Can AI and Machine Learning claim R&D tax credits: Yes AI & Machine learning businesses maybe eligible for tax relief if they are overcoming genuine technological challenges. Qualifying work can include developing new algorithms or machine learning models or solving industrywide technical problems that cannot be easily resolved using standard approaches. However just using AI & machine learning within a project that doesn’t attempt to create an advance is unlikely to qualify.
Can software companies claim R&D tax credits?: Yes. Software companies, SaaS businesses and technology providers may be eligible for R&D tax relief if they are overcoming genuine technological challenges. Qualifying work can include developing new software, improving existing platforms, creating new functionality, or solving complex technical problems that cannot be easily resolved using standard approaches.
What software projects qualify for R&D tax relief?: Software projects may qualify where they involve technical uncertainty and innovation. Examples include developing new platforms, improving scalability and performance, creating complex integrations, developing AI solutions, enhancing cybersecurity, or working with complex data systems. Routine software development or implementing existing solutions would not normally qualify.
Can SaaS companies claim R&D tax relief?: Yes. SaaS companies often undertake qualifying R&D when developing new products, improving platform functionality, solving performance issues, enhancing security or creating new technical solutions. Eligibility depends on the specific challenges involved and whether the work goes beyond routine software development.
Can failed software projects qualify for R&D tax credits?: Yes. A project does not need to be successful to qualify. If your team carried out research, experimentation and testing to overcome genuine technical uncertainties, the work may still be eligible for R&D tax relief even if the final solution was not achieved.
Can cloud costs be included in a software R&D claim?: Some cloud computing and data-related costs may qualify where they are directly linked to eligible R&D activities and meet HMRC’s requirements. This can include certain development and testing environments used while solving technical challenges.
Can outsourced developers or contractors be included in an R&D claim?: Potentially. Whether contractor costs qualify depends on a number of factors such as the nature of the agreement, who initiated the R&D and whether the contractor is based overseas, all of which are part of HMRC’s current rules around contracted-out work. Specialist advice can help determine which external development costs may be included.
What evidence is needed for a software R&D tax claim?: A strong claim should demonstrate the technical challenges involved and the work undertaken to overcome them. Useful evidence can include project documentation, technical specifications, developer notes, testing records, prototypes and details of eligible costs.
Do I need to invent completely new technology to claim R&D tax relief?: No. R&D does not have to involve creating entirely new technology. Improving existing software through technical innovation, such as enhancing performance, reliability, scalability or security, may qualify where the company has attempted to overcome genuine technical challenges.

Technology Case Studies

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Does my Business Qualify?

The simplest definition of R&D is when a company looks for an advance in science or technology. This is deliberately broad and it means it can be interpreted to include the development of physical technologies as well as software.

In order to get R&D tax relief for a technology project, you will need to show in your claim that your company looked for an advance, had to overcome an uncertainty, took steps to overcome this uncertainty, and that this work couldn’t have been achieved easily by someone in your industry.

It only takes 15 minutes to find out if you are eligible for R&D Tax Credits – why not book in a call today?

What Our Clients Say

    
 
 
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   Alex Pawle 
 
 
 
  We went through the discovery call process with Simon and his team. We felt well advised through the complexity of R&D tax claims, and would certainly recommend Cooden to other SMEs.
  
 
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   Craig Coulton 
 
 
 
  Cooden is five stars! Simon and his team stepped in to help our business with a complex R&D tax relief application. Simon’s attention to detail is second to none. His understanding of the nuances of tax law is impressive, and I’ve had the privilege of seeing his reporting first-hand. It’s not often you work with a team that exceeds your expectations, but Cooden has. I’m impressed and you will be too.
  
 
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   Narciso Baldo 
 
 
 
  Simon and the team at Cooden are fantastic to deal with. Responsive, knowledgeable and friendly, they're expertise and insights in all things R&D have been invaluable to us. Highly recommend.
  
 
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   Darren Wynn 
 
 
 
  Exceptional expertise and insight! Simon provided invaluable advice during our exploratory call. Their depth of knowledge and clear communication greatly enhanced our understanding. Truly grateful for their guidance
  
 
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   Dan Frost 
 
 
 
  Excellent advice and support. Simon is clearly highly experienced and knowledgable on all things R&D related.
  
 
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   Alex Butler 
 
 
 
  I had the pleasure of working with Simon, and I couldn't be more pleased with the exceptional accounting and R&D relief advisory services he provided. Simon's expertise in navigating the complex landscape of R&D relief schemes with HMRC is truly commendable.

Simon's deep knowledge and dedication to his work were evident throughout our collaboration. He demonstrated a keen understanding of the intricacies of R&D relief, and his ability to guide us through the process was greatly appreciated!
  
 
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   Gavin Jones 
 
 
 
  Simon was extremely helpful with our R&D tax claim, would highly recommend you speak to him if you have any concerns.
  
 
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   Caroline Lloyd 
 
 
 
  Simon and the team at Cooden Tax Consulting are a pleasure to deal with, friendly knowledgable and efficient.  (On behalf of iPrescribe Exercise Digital Ltd)
  
 
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   Jack Maddalena 
 
 
 
  I have had a great experience working with Simon and his team at Cooden Tax Consulting. We have used them multiple times, highly recommended, friendly experts.
  
 
  
  
 
 
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