R&D tax credits – FTT decides in taxpayer’s favour
The Tribunal made a number of findings that will be of practical use to companies making R&D Tax Credits claims
The Tribunal made a number of findings that will be of practical use to companies maki
HMRC have lost a case against a software company they claimed was not entitled to research and development (R&D) Tax Credits.
The case involved a software company, Get Onbord Ltd. HMRC argued that the company's activities did not meet the criteria for R&D as outlined in the ‘BEIS Guidelines’ (now DSIT Guidelines). The First-tier Tribunal (FTT) found that the company's activities did meet these criteria.
The FTT made a number of findings that will be of practical use to companies making R&D Tax Credits claims and potentially facing similar arguments in enquiries:
- It found that someone who has experience and up-to-date knowledge of software capabilities can be a ‘Competent Professional’ even without formal qualifications;
- It clarified that the use of existing technologies does not preclude a project from being considered R&D if the project involved an overall increase in capability and the development was not just routine; and
- It also made an interesting recommendation that, as well as the company being required to provide evidence of how it meets the criteria in the BEIS Guidelines, HMRC should also provide details of their own scientific analysis and evidence.
KPMG’s R&D team includes a range of experts from software and technical to tax and legal. We support clients to prepare robust R&D claims and documentation, and to respond to HMRC enquiries. Please speak to the author or your usual KPMG in the UK contact if you would like any assistance with R&D claims.
