AI is a leading-edge technology that is constantly evolving. Many companies believe that if they merely adopt the use of AI, it qualifies for R&D Tax Credits. For example, we had a company state that they researched a number of AI models and spent considerable time testing out these models with their data to see if they could find a better solution.
To determine if this fact situation qualifies as eligible R&D, you need to apply the R&D Tax Credit criteria by asking:
- Was a technological advance made?
- Did the R&D project face technological uncertainty?
The answer to both questions to the above example is no. There is no advance as nothing new or improved has been created. The AI model was merely being applied as it was designed. Similarly, no technological uncertainty existed as no problems were encountered. It was a complex endeavour, but no one had to revise or develop a new algorithm for the AI model; it worked exactly as it should have.
If the company had to extend the capabilities of the AI model by developing new algorithms and carrying out iterations and tests to overcome the limitations of the old AI model. Then it is likely that the R&D project would qualify as an eligible R&D Tax Credit project.
How can RDP Associates help?
Our team of technical AI specialists can quickly identify eligible AI R&D projects. But more importantly are able to write-up the project descriptions to be filed with HMRC in a way that HMRC understands. Which results in fewer compliance checks by HMRC and higher overall R&D Tax Credit claims.
Have you ever asked the question “Does AI Qualify as Eligible R&D?”. Or maybe you have a client who would like a free assessment to determine if their R&D project qualifies for R&D Tax Credits. Then please don’t hesitate to contact Jenni at [email protected]