Internet of Things Project Activities
Internet of Things (IoT) facilitates the exchange of information between connected devices. These can vary from wearable devices that collect user’s health data to smart greenhouses that can send real-time plant growth to farmers to Smart grids that allow two-way communication between the utility company and its consumers. Currently, there are over 7 billion IoT devices installed worldwide, and this number is projected to grow up to 35.82 billion by 2025!
These recent years, more and more companies from different sectors are using this technology to simplify, improve, automate and control different systems. As the IoT sector is relatively young, it is not difficult to prove that serious knowledge gaps exist. The fact that your company’s IoT integration projects aim to resolve them would help you validate the claim. It is also likely for developers to follow unconventional methods in IoT projects as the technology is still evolving. As such, innovation in application and even in theory is much more possible in this sector than in others.
When undertaking IoT projects (and any applicable projects in general), you can claim both software and hardware-related activities. Examples of software-related activities usually done for IoT projects include developing new firmware for IoT devices and creating new applications that process and analyse data from customers’ IoT devices. Another software-related activity is developing new technologies of sensory data storage and computing. Meanwhile, for hardware-related activities, creating a new IoT-enabled product or significantly improving its IoT capabilities can be claimed for an R&D tax incentive. Other hardware-related activities include enhancing the performance of microsensors and flexible materials for wearable devices.
Nonetheless, it is still insufficient to rely on novelty and innovation alone when claiming an R&D tax incentive. Companies should also consider whether they could not determine the outcome of the activity in advance and how they conducted the activity because the claim is based on activities of a project rather than the project in its entirety. With this said, it is also possible that even though an IoT- related project may be innovative, the activities are not.
Another issue is where the companies conducted R&D. For instance, activities done to integrate IoT in internal administration processes are ineligible for a tax incentive claim even if their purpose is to generate new knowledge. Computerised maintenance management systems (CMMS), Enterprise Asset Management Systems (EAM), and Fleet Maintenance Software (FMS) that are commonly used internally by organisations for their business processes and where IoT technology is nowadays applied to.
Self-assessing the eligibility of IoT -related development activities may seem complicated. But with our years of experience delivering R&D Tax incentive to many tech companies – some of them specialise in hardware and make use of IoT as well as Machine Learning technology in their projects, we have developed a streamlined methodology to make R&D tax incentive claim simpler. We are confident that we can help you determine your eligible projects and activities, as well as the maximum amount of eligible expenditure that you can claim for your projects.