As UK businesses scramble to keep up with the latest technological advancements, the software development and computing sector is experiencing a small boom. Statista estimates that in 2025, the UK’s software market will reach $38.21b (approximately £29.49b) and grow at a steady rate of 6.03% until at least 2029.

As new and emerging technologies become commercially available, it’s often down to software developers, computer scientists and software engineers to integrate these advances within their organisations. This leads to ingenious innovations as new applications and technical solutions are created to allow businesses, from startups to large enterprises, to capitalise on the potential of technologies like AI.

In fact, software development is considered so important to innovation in the UK that the government revised the criteria for qualifying expenditure for R&D Tax Credits to ensure that common software-related expenses can be claimed, including data licences, cloud computing services costs, and advanced mathematics. In this article, we look at the top R&D trends within software development and computing that are helping to drive impressive modernisations for businesses in the UK.

Industrialising artificial intelligence (AI) & machine learning (ML)

The manufacturing, engineering, construction and similar industries are all keen to modernise by harnessing the power of artificial intelligence (AI) and machine learning (ML).

And the benefits are potentially huge. Businesses can use AI and ML to collect and analyse data from several different sources. For example, data can be taken from factory production lines, demand forecasts, and resource availability reports to create a highly optimised production schedule that considers capacity, supply and demand. With AI and ML, this schedule can be amended in real time, adapting to circumstances as they change.

And that’s not all, there are all sorts of ways that AI and ML can make efficiencies and boost productivity, including predicting when machinery might need maintenance, improving quality control and compliance, and automating simple tasks to free up the time of workers.

Applied AI

While generative AI has stolen many of the headlines, businesses are starting to look to data scientists and systems engineers for practical ways to apply AI.

There are many potential use cases, which are often business-specific, but examples of applied AI include automatically pulling relevant information from documents, writing content, finding the best customers to target, analysing customer calls to improve service and automating time-consuming tasks.

Edge computing

The need for faster processing times (partly driven by the demands of AI) and a desire to mitigate the risk of cloud outages is causing more companies to embrace edge computing, where servers are located physically closer to where data is collected. Storing data locally delivers several benefits, allowing for faster and more reliable processing and reduced cloud storage costs while also helping to protect data from hacks or other online security threats.

Quantum computing

Quantum computing is still very much in development but there are exciting breakthroughs all the time, like Microsoft’s new state-of-the-art Majorana 1 chip.

Quantum computing has the potential to revolutionise software development, leading to new ways to code, new programming languages and faster algorithms that can help to solve problems that are too complex for classical computers.

Cybersecurity

The potent fear of AI-driven cyber-attacks means that we need similarly AI-driven counter defences, with ongoing development in areas like threat detection, response, and vulnerability management. For example, recent research published in Nature, suggests that there are opportunities for breakthroughs through using machine and deep learning to improve cybersecurity in script development, which can automate and enhance software defences.

How can software development projects qualify for R&D Tax Credits?

For many companies, modernising their technology infrastructure – whether that be shifting from a total reliance on cloud computing to edge computing, or incorporating AI and ML into their operations processes – requires software engineers and other technical experts to spearhead complex projects.

Invariably, developers will encounter quite challenging obstacles, like designing new applications to port data across platforms, or integrating new technologies into existing systems, which involves investigating, testing and (hopefully) implementing suitable technical solutions.

Despite the high level of innovation needed to deliver these projects, many companies underestimate their ability to claim for R&D Tax Credits for highly technical software development activities.

But the very nature of these types of projects makes them well-suited for claiming relief, as many will have to overcome uncertainties through systematic testing, leading to either a scientific or technological advance. This is especially true as mathematical advancements are treated as scientific advances (for the purposes of claiming R&D relief). This means that activities common to software development, like data analysis, modelling, algorithm design or other areas of computer science, are all potentially eligible for relief.

And if your project qualifies for relief, you can claim for your eligible expenditure, including staff costs, software, data licences, cloud computing, contractor costs, consumable items and other relevant R&D expenditure (including indirect expenditure, like admin or security costs related to your R&D activities). The potential benefit can be significant.

How Leyton can help

Companies often worry that claiming R&D Tax Credits for their software projects will be too time-consuming to be worthwhile, or they can be put off from claiming because they’re not sure if their work qualifies.

At Leyton UK, we make the whole process as quick and pain free as possible. We have a dedicated team of software and computing experts, who are frequently praised by our clients for their technical understanding and friendly can-do attitude.

We go above and beyond when it comes to putting together claims, partnering with your team to identify qualifying expenditure, gathering evidence and preparing a robust technical report that clearly explains to HMRC how your work meets their strict criteria.

Has your business recently completed a complex software project? If you’d like to explore your options for claiming R&D relief, we’d be happy to help. Speak to a specialist today.

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