How privacy regulations are affecting IT innovators…and how R&D can help you stay one step ahead.
The European Commission put forward its EU Data Protection Reform way back in January 2012, to make sure that Europe would have robust regulation to protect its citizens’ private data in the digital age. The long process of drafting and redrafting resulted in two documents that were released in May this year – the EU Data Protection Directive and the General Data Protection Regulation.
With over 90% of the data in existence today collected in the last two years, the rate at which businesses, governments and communication networks are collecting data is rapidly accelerating. With so much data gathered by so many different parties, security has become a complicated issue, and this is at the heart of the new EU regulations.
Current guidance on data security has led to a fragmented approach across Europe, with different countries across the European Union each having their own slightly different laws under the EU Directive – particularly in terms of who has responsibility over data security. The launch of the new Directive will clarify guidelines, while the Regulation will go one step further, making certain elements of data security a matter of EU law. Essentially, it forces EU member states to adopt stronger, more unified data protection laws into their national law by May 2018.
What does this mean for IT businesses in the UK?
Britain’s forthcoming split from the EU doesn’t mean that the regulations can simply be ignored until Article 50 exempts us from them. Regardless of the UK’s own increasingly stringent data laws, the GDPR will apply to any party that collects and stores data from EU Citizens.
Besides, security is an increasingly sensitive issue in data collection, and under GDPR regulation consumers will be given the formal right to seek damages against parties who allow their data to be compromised; a risk that isn’t worth taking, particularly for smaller IT innovators and start-ups.
As the new rules apply to both data processors – those businesses who collect, store and translate data – and controllers – those who use the data – a large number of IT businesses could find themselves facing costly overhauls to make sure that their systems conform to code.
How can R&D help?
Research and development into new security protocols can be a lengthy and expensive process, and not every avenue explored results in a perfect solution. With the digital landscape changing constantly, it’s likely that alterations will need to be made frequently; not just tying up resources, but manpower.
R&D tax credits can not only relieve the financial impact of these changes, but can actually boost cash flow to help further developments into more profitable ventures.
When it comes to IT and technology companies, many accountants fail to recognise the complexities of the R&D that takes place, leading to less expenditure being successfully claimed. At MCS, we’ve processed R&D claims for a wide range of IT and technology companies with excellent results – take a look at this month’s case study to see how we’ve helped one software company access R&D cash flow.
To find out how MCS Corporate Strategies can help you access your R&D potential, call us on 01926 512475 to speak to a specialist now.