Travel companies working on new software projects could be missing out on significant amounts of tax relief, according to Elman Wall Travel Accountants.
Travel firm software projects could qualify for tax relief
Travel companies working on new software projects could be missing out on significant amounts of tax relief, according to Elman Wall Travel Accountants.
Delegates at the joint Aito agents and operators conference in Madeira were told a relaxation in guidelines for the Inland Revenue’s research and development tax credits meant some software projects in the trade now qualify for relief on corporation tax.
Elman Wall director Russell Elsen said “a huge number of travel companies” were potentially losing out simply because they did not know their projects qualified their companies for tax relief.
From April this year, tax relief is worth 225%, meaning a £25,000 project could entitle a company to corporation tax relief on the equivalent of an outlay of £56,250.
“For most companies you could get back between a quarter and a third of the actual cash cost (of the project),” said Elsen. “It’s not widely known in the industry. Potentially you are missing out on significant tax relief. It could be the difference between whether you undertake a project or not. If you are going to spend £100,000, you might get £30,000 back.”
Examples of projects that could qualify are where companies need a bespoke system to connect their website with their travel reservations system and back office systems. “If your systems are not designed to talk to each other and you need to create a bespoke solution it may well come under research and development,” he said.
