Artificial intelligence (AI) is a rapidly evolving technology, and as such, there are a variety of tax breaks available to AI enterprises. If your organisation is interested in working on artificial intelligence, the good news is that you may be eligible for Research and Development (R&D) Tax Relief on the work you undertake.
What is artificial intelligence? There are many definitions of AI, but in general, it refers to machines being able to think and learn like humans. In other words, computers that can understand human speech, see and recognize objects in images or videos, understand how concepts link together (e.g., knowing that apples and oranges are both fruits), answer general knowledge questions, read books and documents, converse fluently on common topics, etc.
HMRC R&D Tax Relief is a government program that lets companies claim more money on R&D than they have spent. The scheme is open to all companies, and the criteria for eligibility are very broad. Companies can claim for R&D that is “in the interests of the company’s business” and carried out in the UK. Be aware that HMRC defines “in the interests of the company’s business” very broadly. It could be anything from developing new products or services to improving existing products or services.
SME R&D relief allows companies to:
Are you working on Artificial Intelligence? If yes, then you are eligible for research and development Tax Relief. Additionally, your project must meet the following criteria to be eligible for R&D Tax Relief:
You must create a new or enhanced product or service. For example, if you’re creating a new website, the design and functionality of the website are new and would qualify for R&D Tax Relief. However, if you’re modifying an existing product or service, then it would not qualify.
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