Client Overview
A Chicago-based global technology and business solutions company, the client helps organisations achieve their goals and improve their business performance on a wide range of services, including digital transformation, cloud computing, data analytics, cybersecurity, and IT staffing. The client has a strong focus on innovation, and the company has developed several proprietary technologies and frameworks such as Cloud Architecture for mortgages by developing Commercial Platform Re-Engineering, application insight data ingestion system, API management versioning control mechanism, etc., that it uses to help clients improve their business processes and drive growth.
Problem Statement
Our client was new to R&D Tax Credits and had been believing that most of their works were only routine project developments and non-claimable. Although the company employed highly skilled developers and software engineers and engaged in a wide range of solutions and services for their customers including data analytics, Development & Operations (DevOps) services, Internet-of-Things (IoT) solutions, cloud services, application/product development and Artificial Intelligence (AI) & Machine Learning (ML), they did not have any pre-assessments conducted on R&D Tax Credits and no data was recorded internally with respect to R&D expenditures and contributions.
Our technology experts guided them through the R&D Tax Credits Scheme and presented them with an overview of qualifying costs and activities. Based on this, a high-level assessment of their project activities was conducted, and guidance was offered on how it was feasible for them to claim their projects costs for any research and development activities undertaken within the financial year. Based on the brief the client initiated their R&D claim process and claimed for two consecutive years with our assistance.
Our Process
To begin with, ResearchQX conducted an R&D assessment session, with the client’s technical leads and finance heads. The session discussed their ongoing projects and undertook discussions to explain the R&D Tax eligibility criteria. In addition, the session also explained to the client side how any of their ongoing work with their customers could add on to the scope of R&D claims.
Following the initial session, an in-depth discussion and analysis was conducted to make the client understand areas where any of their project work would qualify for the scheme under the R&D Expenditure Credit (“RDEC”) regime.
The client was able to gain clarity on how their potential claims could work and expressed further interest in pursuing them with our guidance and reference to the relevant legislation. Projects to improve interconnectivity between SharePoint and webMethods integration server, encrypt and ingested data within the API framework, automate the CI/CD production, were determined to be eligible as they were resolving technological uncertainties. After collaborating with the client’s technical and costing teams, we completed the claim analysis and prepared a comprehensive report to detail the claim methodology and to illustrate the type of project activities claimed, which were then submitted to HMRC. Under a month’s time the claim was approved.
Key Metrics
Despite being a sizable company, the client was interested in gaining a thorough understanding of the R&D Tax Credits scheme and benefiting from the RDEC regime. The objective was to understand the scope of their ongoing R&D activities and explore ways to increase it in the coming years to contribute towards more innovation and research.
The value we have brought to the client is not just limited to the tax-saving or cash benefit obtained from the claims filed with HMRC, but it also expands to helping the client implementing efficient methods of flagging R&D activities and expenditures in real-time to facilitate the future R&D claim process where eligible work and costs can be more easily identified and assessed. In addition, we also provided regular updates to the client on the latest changes in R&D tax legislation which helped them with their future R&D planning.
