Case Study

ChurchSuite’s R&D tax credit claim for software development

ChurchSuite is a young and growing software development company, focused on building world-leading software to support church life at an affordable price.

Client

 ChurchSuite

Industry 

Software Development

Cash Benefit

 £190k (to date)

An introduction to ChurchSuite

Founded in 2011 by Gavin Courtney following an interest shown by his local church in the tools he had built to help them run more efficiently, ChurchSuite now supports a growing network of over 1000 churches across the UK and internationally.

Since its inception in 2013, ChurchSuite has worked relentlessly to develop its own application-based platform exclusively for church/charitable communities. At the time work on the concept was commenced, the user experience, features and functionality ChurchSuite was seeking to deliver in its solution were completely unrivalled – nothing like this existed in the global marketplace. From the moment Gavin commenced work on his development goals, he has never looked back. Leading a growing developer team, Gavin continues to improve and add to the capabilities of the ChurchSuite product, extending knowledge to design tailored solutions for an ever-growing network of churches and charitable organisations.

Working with ChurchSuite

I was contacted by Laura in late 2015 who had recently started a new role as office manager at ChurchSuite. Laura had moved from a company specialising in technical solutions for integrating state of the art printers that I had been assisting with their R&D claims and got my details from previous colleagues in their finance department. Laura was wondering whether R&D tax credits could be relevant to the ongoing work undertaken by ChurchSuite and invited me to meet with her and Gavin to explore things further.

Within the first 10 minutes of our discussions, it was clear there was a compelling basis to make R&D claims for the work undertaken since the company’s inception in 2013, and ongoing, due to the continuous drive to add to and improve the product.

R&D tax relief makes such a difference to our business. We really value the knowledge and support Claire provides year on year via a process that is thorough yet relaxed. Working with a specialist tax adviser gives us confidence that our claims are tax compliant! - Laura Haywood-Jeffery, Executive Assistant

ChurchSuite’s R&D eligibility

UK registered company

ChurchSuite meets the criteria of being a UK company with a relevant trade that is subject to UK corporation tax - they are developing software with a view to realising value from subscriptions from churches.

ChurchSuite incorporated in April 2013 and ran its first accounting period to 31 August 2014. Meeting in September 2015, we did 2 years claims together supported by a single R&D tax credits claims document. ChurchSuite ran a long accounting period to 31 August 2014 and so we were in time to claim for all work undertaken since incorporation in April 2013.

I’ve worked with ChurchSuite’s growing team since 2015

Purpose

ChurchSuite created technology to deliver the end user goals of its new product offering and continues to make changes to it to add new features and functionality. In its work to create, maintain and improve all aspects of its product, ChurchSuite simultaneously creates or makes changes to technology-based processes.

Focus

Through its work, ChurchSuite meets a key requirement of the R&D tax legislation: to seek an advance in technology.

There are a number of ways the BEIS guidelines for R&D recognise an advance and it’s not possible to say one is uniquely right i.e., an advance can be defined in more than one way.

Over the years, many advances have been attempted by ChurchSuite, a few of these have been selected below by way of example to illustrate how an organisation can think about linking these to BEIS guidelines for R&D:

Founding something that doesn’t exist - 9(b) of the BEIS guidelines: Creating an intuitive data processing capability that accommodates multiple character types for error free data subject identification from CSV file formats. ChurchSuite needed to develop new knowledge and capabilities to achieve this goal.
Improving something that does exist - 9(c) of the BEIS guidelines: Seeking to deliver heightened intelligence for automated routines around data recognition and placement. ChurchSuite needed to make technological changes to generate outcomes that were significantly better than existing capabilities based on publicly available enabling technologies applicable to such processes.
Duplicating something in a fundamentally different way - 9(d) of the BEIS guidelines: Developing the parameters of the native system to deliver an all-encompassing, robust, and reliable proprietary email solution that duplicates best of class email functionality in a light-touch approach. ChurchSuite needed to build a proprietary enabling technology to duplicate the effects of market leading email software in a fundamentally different manner so that it could work effectively within its product suite. It was not possible to simply embed existing email solutions owing to incompatible underlying factors.

Problem solving

Seeking an advance in science or technology as outlined above is just one part of the requirements. Your organisation will also need to demonstrate that the solution was not available by reference to baseline knowledge and capabilities in your industry as a whole. Your organisation will be iterating from known principles and approaches to create or extend knowledge and capabilities that represent genuine and non-trivial betterment.

The presence of scientific or technological uncertainty is key, meaning that knowledge of whether something can be done or how to achieve it in practice is not publicly available or easily arrived at from what baseline knowledge is available in the public domain. This is a judgement call by a professional in your industry with relevant and appropriate knowledge and experience.

For most organisations, this will be a judgement call from the technical staff working on these projects. In ChurchSuite’s case, its lead software developer and founder. I worked with Gavin to help him understand and properly assess the challenges faced by ChurchSuite in its work.

Gavin and I discussed the key unknowns, the strategic questions asked as part of assessing whether objectives would be feasible for development or how to achieve things in practice – How? Would? Could? Whether? What? By way of example, taking the goal to advance technological capabilities to deliver a proprietary email solution as a high level insight to identifying challenges faced, there were significant unknowns presenting around barriers to developing the functional capabilities and features based on a single database model, scalability to support tens of thousands of emails being sent simultaneously that could also support differences between email providers, coping with scheduling between different time zones, methodologies to detect and handle rejects, creating protective routines to obviate strain on the servers and overlaying failsafe protocols in instances of disconnection.

Tax technical point: The purpose of the work can impact on whether the tax treatment of costs falls to be revenue or capital in nature. Only revenue costs can be included in an R&D tax credit claim.

Basis

ChurchSuite’s solution relied on applying knowledge in software development and software engineering to iterate methodologies, approaches and techniques to produce new or improved capabilities by reference to the underlying technologies collectively and uniquely employed for the purpose and focus of the advances sought.