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R&D tax credits isn’t limited to companies doing work in laboratories. In fact, almost any company in any industry is eligible for R&D tax credits, so long as the business is undertaking development activities to seek to achieve an advancement in science or technology.
Many businesses are doing this in their day-to-day work, from software development and engineering companies to firms working in food production.
How manufacturing and software companies can claim R&D tax credits for the development of new products
Most companies working in manufacturing or software development will be undertaking eligible qualifying activities. If the technical lead of a project (the R&D manager, lead engineer, or lead developer) is struggling to overcome the project’s technical challenges, then it will almost certainly qualify for R&D tax credits.
What type of software projects qualify for R&D tax credits?
Common examples of software development projects that may qualify for R&D tax relief include:
- state-of-the-art 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;
- 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; or,
- means of integrating hardware and software platforms.
What type of manufacturing and engineering projects qualify for R&D tax credits?
Common examples of product and process development projects that may qualify for R&D tax relief include:
- innovative product development using computer aided design tools;
- development of second generation or improved products;
- tooling and equipment fixture design and development;
- developing unique computer numerical control programs;
- designing innovative programmable logic controllers;
- designing innovative manufacturing equipment;
- prototyping and three-dimensional solid modelling;
- designing and developing cost-effective and innovative operational processes;
- integrating new materials to improve product performance and manufacturing processes;
R&D tax credit claim opportunities available across other industries
Many businesses don’t realise that they qualify for R&D tax credits or that they are not claiming their full entitlement. The R&D tax credits scheme has been in existence for over 15 years and over €500m p.a. is currently being claimed.
What activities can be included in an R&D tax credits claims?
The following activities would be considered eligible for R&D tax credits:
- defining technical objectives;
- identifying uncertainties;
- feasibility studies;
- reviewing new and competing technologies;
- analysing, designing and developing the technology;
In addition, certain indirect support activities may qualify for R&D tax relief, such as:
- administration, finance, and personnel services specifically required to support R&D activities; and,
- training to support R&D.