Specialist Tools Company building e-commerce software benefits from UK R&D claim
Our client is a specialist machine tools supply business for the manufacturing industry in the UK. They have been operating for over a decade and are well known for supplying ceramic tiling tools, cutting tools and other kit to professional tilers both for domestic and heavy duty industrial usage. The company has developed a proprietary e-commerce platform to provide a unique sales system for professional tilers.
As a company focusing heavily on e-commerce technologies, the client had not come across any standard market available package that could deal with the complexities and specific requirements of the processes employed in this area. However, they were unsure if developing technologies could qualify under the R&D scheme, given there are already larger e-commerce specialist companies engaged in software development in a similar field.
Invenics conducted an initial assessment with the client to understand their technology development and where technologies were being advanced to deliver a solution that was a step change from the rest of the industry. The client went through a detailed discussion of the R&D guidelines to establish whether their developments met the thresholds for technological uncertainty and advances. Having conducted this review, the client realised that their developments met the R&D eligibility criteria. Invenics was engaged by the client and helped them to complete the assessment and compile the R&D Claims.
We engaged with the client’s technical and finance staff to obtain the relevant technical and costing data. Once this was obtained, we conducted detailed review sessions with their technical staff to help them assess the R&D eligibility of projects.
Specific focus and emphasis was laid on establishing the boundaries of R&D eligibility recognising that R&D begins when work to resolve technological uncertainties commences and ends when the uncertainty is resolved. Based on this understanding, the client were able to segregate the more routine functional features of their proprietary e-commerce platform as non-qualifying and only included the work on architectural side leading to advances in technology as qualifying (for example work performed to reduce response times from 1 second to 400 milliseconds and development of a new REST API framework).
Invenics prepared a detailed report for the claim and submitted it to HMRC. The claim was agreed within 6 weeks and the client received a substantial amount of cash.
The client has benefitted from a robust claim process and achieved clarity around how claims can be made for e-commerce software projects relating to companies in the manufacturing sector. They have also gained good understanding of HMRC’s guidance around how R&D eligibility applies to software projects. They now have a clear repeatable process which can be executed year on year to provide continuing R&D benefits and have continued to engage with Invenics for future periods.