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Leading Multinational System Integrator – Optimising the benefit from R&D Tax Credit claims for their work with Financial Services (Insurance) client

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CLIENT Overview

Our client is one of the leading global technology consulting and system integration companies with world-wide turnover in excess of $500 Million. They work with several blue chip customers in the UK and internationally and execute projects which require constant technology improvements. Their customers trust them to provide development services for complex transformational programs. One of their customers is a large international Insurance group with projects in the areas of claims policy administration and management. Our client works in close collaboration with their customers to develop advanced digital platforms and solutions.

Leading Multinational System Integrator – Optimising the benefit from R&D Tax Credit claims for their work with Financial Services (Insurance) client

The Ask

Our client were initially unsure of whether they could claim for projects which were not internally funded. They had been advised that only their customers could claim for R&D Tax Credits as the customers were paying for the work. Furthermore, our client were not clear about how R&D eligibility criteria could be applied to any projects, as most of the work was being performed with technologies that also involved commercial off the shelf software. 

Based on the above, the client was unable to come up with a methodology that gave them the confidence that a robust R&D claim could be prepared with all the relevant supporting information. 

Invenics discussed the current position with the client and helped them to appreciate that complex projects performed by system integrators can be aligned with the R&D scheme requirements. Invenics were then engaged by the client to prepare full R&D claims, which also included the work performed by them on their insurance customer project. 

The Ask

Our Process

Invenics reviewed the client’s engagement with their customer to understand the way it was structured. As part of this Invenics reviewed the contracts (MSA, SOWs) between the client and their customer to understand whether it was for the provision of staff, services, or completed deliverables. As can be expected on large and complex projects of this nature, the contracts were found to include a mix of these types of activities. Therefore, Invenics undertook further reviews with the client’s technical staff to overlay the information from the contracts with the actual working practice employed by them. 

Following this detailed review, and using a scorecard based approach, we helped the client to assess whether the work performed was akin to turnkey development, wherein although their customer had paid for the work, the technical and commercial responsibility/risk for development and delivery lied with our client. At the same time, the client also assessed that although commercial off the shelf software was used as building block, there were significant technological uncertainties on the project due to requirements from integration, infrastructure, messaging and limitations of existing software. 

The detailed overviews of R&D eligibility criteria and thorough review of contracts established a clear position for the client to claim parts of the project. Detailed technical descriptions were prepared by the Invenics team to outline the technological uncertainties faced by the client’s team, and more importantly, to demonstrate that the client had ownership and risk for technical delivery. The claim was submitted to HMRC and approved. 

Our Process

Key Metrics

Our client has benefited substantially from the R&D scheme and now has a robust annual process which enables them to claim close to £500,000 of cash benefit each year. They have a near real-time process to perform R&D eligibility assessments close to the financial year end and have a better understanding of the requirements for being able to claim as a system integrator within the Financial Services industry. They are also able to apply some of the learnings from the R&D methodology with their Insurance customer to other customers in the financial sector.

Key Metrics