List of software development activities that qualify for R&D Tax credit relief

Although many IT companies carry out R&D, little information is available to help these companies identify qualifying R&D activities for tax purposes.  How does a software developer distinguish between activities that qualify for relief and those that don’t? And, when do R&D activities cease to continue to qualify?

Through a simple google search of the term R&D companies will be able to establish that the key criteria for accessing R&D tax credit relief is that work “should be seeking to achieve a technological advance or by overcoming technological uncertainty”. What does this mean in practice?

When reviewing the activities of a qualifying business we start by separating software projects into three categories;

• those likely to contain R&D,
• those unlikely to contain R&D, and
• those that could contain R&D.

We do this based on information made available by the Irish Revenue authorities and also based on guidance from authorities in the UK, the US, Canada and the OECD.  For the benefit of software developers we have categorised typical software development activities into the above three categories.  You can access this list by downloading our briefing paper using the link below

 

http://www.andrewstax.ie/ATC_SDRD_LE_110608.pdf

 

Please note this is a limited extract.  For the full version contact Derek Andrews or Michael Gilmartin at Andrews Tax Consulting.

Email : info@andrewstax.ie
Skype : AndrewsTaxConsulting
Phone : +353 1 544 4434