A logistics tracking company has received £309k cashback over the past three years from HMRC for innovative software development that provides real-time logistics tracking, reports Rob Sowden of Bournemouth-based consultancy Business Cash Enabler.
“Many businesses are not aware that they may be entitled to government funding for certain innovation activities that they perform. Incredibly, some businesses have missed out on hundreds of thousands of pounds over the years.
“Most frequently, businesses in sectors such as manufacturing, engineering or pharmaceutical have claimed cashback under the government’s Research & Development tax credits scheme. But these sectors do not have exclusive entitlement to the government handout. What often gets overlooked are bespoke software development and digital projects and even internal IT enhancements where systems or processes are appreciably improved to achieve greater efficiencies.
“In the example cited, this logistics tracking company has received £309k in the past three years. They don’t produce a tangible product but are a service company and their main qualifying activity was the creation of a bespoke app to enable real-time logistics tracking, which was achieved by adapting off-the-shelf software. Aside from that bespoke development work, they enhanced their in-house IT systems which qualified under the scheme rules for a rebate of some of the staff and external development costs.
“Knowing what is in scope for a tax credit or cashback requires detailed understanding of what the scheme rules allow for as qualifying ‘R&D’. Without this detailed knowledge, it can result in a non-claim, an under-claim or even an over-claim, which may generate an HMRC enquiry with a resultant clawback. Maximised claims result from a technologist-led, not an accountancy-led approach, to ensure all qualifying workstreams are included.”
About Business Cash Enabler
Dorset Chamber member Business Cash Enabler does not contract with companies but provides a free eligibility checking service and works with a specialist provider that assigns a technologist with the relevant sector specialism to ensure each business obtains their maximum entitlement.