R&D Tax Relief in Blockchain Technology
In the rapidly evolving landscape of technology, blockchain stands out as a revolutionary force.
Originally the backbone of cryptocurrencies like Bitcoin, blockchain has now found applications far beyond digital currencies, extending into fields such as supply chain management, healthcare, and fintech. As companies delve into developing blockchain solutions, understanding the potential for R&D tax relief is crucial for fostering innovation and maintaining a competitive edge.
Blockchain technology’s ability to ensure data integrity without a central authority has made it a valuable tool across various sectors. In supply chain management, it enhances traceability and reduces fraud. In healthcare, it ensures the security and privacy of patient data. In the financial sector, blockchain drives innovations in secure transactions and asset tracking.
R&D tax relief can significantly offset the costs associated with developing these blockchain technologies. Companies can claim relief for relevant expenses including staff costs, software, and subcontractor fees related to R&D activities with recent legislative changes enabling companies to be able to claim for relevant cloud hosting and data license costs for accounting periods starting on or after 1st April 2023.
Within recent years, we have seen a rise in eligible companies wishing to claim corresponding to the UK’s rising tech/fintech scene. Whether it be exploring new applications and functionality, improving scalability and efficiency or enhancing security features, we have collaborated closely to securing R&D relief for several emerging companies:
- A fintech company developing a blockchain-based payment system that reduces transaction time and fees.
- A healthcare technology company using blockchain to securely share medical records while ensuring patient privacy.
- A compliance and risk solutions company leveraging innovative distributed ledger technology for ID management, compliance, risk management and verification.
These case studies not only show the plethora of use-cases for blockchain technology but also the breadth of experience we have at handling successful R&D tax relief claims within the high-tech sphere.
At RCK Partners, our team of expert consultants work together with our clients to identify these qualifying R&D activities within blockchain projects. Our software consultants, with their deep understanding of both the changing R&D scheme and emerging technology, can pinpoint eligible R&D areas, while our compliance team ensures that claims are optimised whilst adhering to tax regulations and HMRC’s shifting guidance.
In conclusion, blockchain technology, with its potential for widespread application and innovation, is a prime candidate for R&D tax relief. As businesses continue to explore and expand the capabilities of blockchain, leveraging tax incentives can be a significant boost, allowing the opportunity and financial flexibility to innovate boldly and sustainably. With expert guidance, companies can navigate the complexities of R&D tax credits, ensuring they reap the full benefits of their innovative efforts.
Contact us here for a free audit of your R&D tax relief status.
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