R&D tax credits and GDPR 2018-04-27T14:30:07+01:00
r&d tax credits and gdpr

Complying with GDPR

With the General Data Protection Regulation (GDPR) set to be introduced in less than a month, businesses are working to ensure that their operations are compliant in regards to their handling of data. Not only is it important that companies comply from a legal standpoint, but it could also be advantageous when it comes to claiming R&D tax credits. We investigate further.

Collection and storage of data: issues of business compliance

Some businesses will hold data across multiple legacy systems, meaning they won’t only have the issue of trawling through more data than expected in traceable areas, but will also face genuine challenges in regards to finding data in new, unexpected systems. GDPR can therefore affect a business’ wider technology, forcing them to make huge overhauls that may not have been apparent at first glance.

As has already been stated by the government, the repercussions are significant for all data breaches, be they minor and/or unintended, and regardless of the size of the company. NCC Group, a global cyber security expert body, estimates that the total value of fines to UK businesses for data breaches in 2016 of just over £880K would’ve been more than £69 million under the incoming GDPR rules. Therefore, developing a robust IT security system is imperative to avoiding this.

There’s also the question of finding effective ways of deleting data, which is seldom as easy as it sounds. Several technical issues occur when getting legacy systems to ‘forget’ individuals and their data, meaning reliable solutions need to be developed.

What many aren’t aware of, however, is that research and development into IT security systems and data deletion can be eligible for R&D tax credits. By simply adhering to the new rules and enabling an expenditure which can be offset against your tax bill, cash to companies attempting to find adequate solutions could be available.

Who is eligible

Either way, R&D tax credits can help offset the expense of complying with GDPR – and, of course, seeking professional help in such cases is recommended. Businesses either currently developing GDPR compliant systems or those that have completed their main GDPR overhaul in the last two financial years could potentially benefit from R&D tax relief. Those who feel their projects involved significant time, resources and expenditure should take steps to confirm whether their projects qualify for a corporation tax reduction.

R&D credit calculations

If you have received confirmation that your claim is eligible, the next step is to calculate the R&D tax credit that is due to you. Using our R&D tax relief calculator is one way to determine – or at least, obtain an estimate – of how much you may be able to offset against your corporation tax bill. Simply answer some questions about your business and your R&D finances for an instant calculation. Up to 33p for every £1 spent on R&D can be claimed, which could mean a significant – and much needed – cash injection into your business.

Average R&D tax claim is £56,000

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