R&D Tax Relief for Vehicle Telematics

5th December 2019

Vehicle Telematics – a technology most thought of as a ‘little black box’ integrated into a vehicle or hidden in the dashboard. The capabilities and benefits of these systems cannot be under-estimated, and their current capacity of use is just the beginning. It is important to remember the financial boost that the development of these ‘little black boxes’ can give your business, in the form of Corporation Tax Relief through claiming R&D Tax Credits!

Developing the next-best telematics systems is all about improving safety, connectivity, monitoring driver behaviour, promoting ‘greener’ driving and predicting vehicle maintenance needs which all link to lowering insurance costs, running costs and tail-pipe emissions from vehicles, whether they be fleet-operated or your own personal car.

The introduction of different types of vehicles; electric (EV), hybrid, hydrogen, connected and autonomous vehicles (CAV), and the roll out of 5G connectivity means that development in this sector is bound to spike as the technology needs to progress to keep up with the ever-advancing external influences.

When it comes to claiming R&D Tax Credits for the development of telematics systems, cutting-edge advancements are great; but even incremental changes to improve an existing system can qualify as eligible R&D activities.

Providing the R&D activities you undertake “achieve an advance in overall knowledge or capability in the field of science or technology and resolve scientific or technical uncertainty”, your business could be eligible to make an R&D Tax Credit claim.

Here are some examples of qualifying R&D activities:

  • Improved data transmission – GPRS/3G/4G
  • Extending capability for 5G data
  • Improved GPS acquisition times
  • Extended battery life (programming)
  • Improved data capture from ODB ports
  • Energy harvesting technologies
  • Improved reporting and dashboard
  • Installation trial and error for new vehicle types e.g. Hybrid/EV
  • Realtime driver behaviour monitoring
  • Integration of third-party data streams
  • Integration of machine learning algorithms for data processing and analysis

These are just a few of the activities you may have already completed or are currently undertaking which makes an R&D Tax Credit claim for your business possible.

In connection to vehicle telematics systems, there is also the element of Fleet Management software – the development of bespoke software can also be included in an R&D Tax Credit claim – you can find out more about eligible software development activities in another of our blogs here.

Through the SME scheme, it is possible to claim up to £33 for every £100 spent on R&D for costs such as materials, PAYE staff, sub-contractors and software. It’s important to remember that you can claim R&D Tax Credits for your current financial year, as well as for the 2 years previous. Therefore, to optimise your tax relief, it’s important to make sure you also submit your retrospective claim.

Swift R&D’s process is specially designed to help you to build robust and successful reports to be submitted to HMRC – find out more about our process here.

To calculate how much your claim could be worth, you can use our online R&D Tax Credit Calculator – simply input a few figures regarding your R&D spend and learn how much you could be claiming.

Our team of expert Consultants are on-hand if you require any assistance, to produce a maximised R&D Tax Credit claim – you simply need to get in touch.

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Chris Stuttle

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