The WBSO is a grant that financially supports companies in research and development work. In this blog, you will learn how to qualify, why accurate administration is important for a successful application and how you can easily improve your time registration to benefit from this subsidy.
What is the WBSO and why is it important?
Developing new products, technologies and services takes time and money. Fortunately, in the Netherlands, there is the WBSO (Research and Development Work Promotion Act), a subsidy that financially supports companies in “research and development work” (S&O).
'Investigation' means specific research aimed at finding new solutions, techniques or methods within a technology or process. This may include:
- Research into new technologies or processes.
- Development of entirely new software or products.
- Technological improvements that contribute to innovation.
Eligibility for the WBSO
To qualify for this subsidy, as a company, you must meet certain conditions, including accurate time registration. We'll tell you more about this later.
The WBSO is a tax scheme that helps companies reduce innovation costs. The government is thus encouraging companies to invest in research and development. Whether you are an SME, startup or large company, if you are developing innovative products, processes or software, you may qualify for the WBSO.
What are the benefits of the WBSO?
A number of the benefits of WBSO are listed below.
- Lower labour costs: The most important cost for many companies that innovate is the salaries of employees who work on projects. With the WBSO, you can reduce part of these wage costs.
- Tax benefits: The subsidy is applied as a deduction to payroll tax, so that you, as a company, immediately pay less tax.
- Access for different business types: Both startups and established companies can make use of the scheme.
The WBSO is therefore important for companies that want to keep innovating without being financially inhibited by the high costs that this often entails.
💡 Read more about this important publications about the WBSO.
Requirements for the WBSO grant
To apply for the WBSO grant, as a company, you must meet a number of conditions:
- Innovative activities: The work you do should focus on developing new technologies, products, processes, or software.
- Dutch payroll tax: Your company must pay payroll tax in the Netherlands.
- Accurate administration: A detailed time registration is required to demonstrate that you are actually carrying out R&D activities.
- S&O statement: You must have an R&D statement, which you will receive after your application has been approved by the Netherlands Enterprise Agency (RVO).
The RVO is the body that assesses the WBSO applications and awards the subsidy. It is therefore crucial that your application meets all the conditions and that your administration is in good order.
💡 Read more about this how to apply to WBSO via the RVO.
Why is time registration necessary for WBSO?
One of the most important conditions for applying for the WBSO grant is that you accurately track how much time your employees spend on R&D activities. The RVO wants to know exactly who did what, on which days and how many hours were spent on the various innovation projects.
Why is this so important?
- Accountability: The WBSO subsidy is a tax benefit, and like any form of tax deduction, you must be able to prove that you meet the conditions. A detailed time record shows exactly how much time and resources have been spent on R&D projects.
- Audit: The government can carry out audits to check whether companies have correctly received the subsidy. Without proper time registration, you risk recovering the subsidy, which is not only annoying, but can also have financial consequences.
- Transparency and efficiency: Good administration provides insight into your own processes. You can make adjustments more quickly if it appears that a project is taking more time than expected or if you notice other bottlenecks.
🎙️ Listen to our podcast about finding and applying for subsidies.
How do you keep an S&O administration?
As soon as you start an R&D project, it's important to keep records right away — even if your application hasn't been approved yet. Make sure you keep all letters and orders from the RVO, and keep a close track of the following items:
Time registration
In your time sheet, you record exactly how much time each employee spends on R&D activities per day.
- Use a time sheet: This can be done in Excel, but you can also use a system that is better suited to your way of working. The most important thing is that you record the hours per day, per project and per employee.
- Flexibility between projects: If a project takes less time than planned, you can shift the remaining hours to other approved R&D projects.
- Sickness and leave: Do not record hours for employees who are sick or on leave. This can be checked.
- Update regularly: Update your time registration at least every 10 business days to keep an up-to-date overview.
Project administration
For each project, you must clearly record what has been done and how the work is progressing.
- Document everything: Gather all important documents such as reports, drawings, emails, and other evidence. Keep these documents organized by project, and make sure they include a date and the author's name.
- Keep track of progress: Make a regular brief overview of progress and keep all documents for at least 7 years.
- Digital tools: For software projects, you can use systems such as Git (for version control), Jira (for keeping track of tasks) to support your administration, or a tool like TimeChimp (for keeping track of hours on projects).
Cost and Expense Administration
If you chose to keep track of actual costs and expenses when applying for WBSO, you must be able to prove them.
- Use a cost model: You can use the WBSO input model (Excel), but you can also use your own method, as long as it is clear and complete.
- Keep all documents: Keep track of everything that supports your expenses, including invoices, receipts, contracts, and bookings.
- Shared use: If a purchase, such as a machine, is also used for other business activities, you should calculate exactly what part was used for the R&D project and include it in your records.
- Finish on time: Make sure that your administration of costs and expenses is complete within 2 months of the end of the calendar year.
By following these steps properly, you will meet the requirements of the RVO and prevent problems checking your WBSO application.
Tips for applying for WBSO
Good time registration is essential for WBSO. But how do you ensure that this process runs smoothly? Here are some practical tips:
- Register daily: Ask employees to keep track of their hours every day. This reduces the chance of missed hours or inaccurate records. The more consistent you are, the easier the final reporting becomes. Register hours at least 10 days after execution.
- Clear description of activities: Make sure that the descriptions of the registered hours are specific. For example, “Research into new algorithms for data analysis” is better than “Software development”. This helps to make it clear that the activities fall under S&O.
- Use a time registration tool: Manually keeping track of hours can be error-prone. Tools like TimeChimp make it easier to record hours accurately, generate reports automatically, and ensure consistency.
- Provide a project structure: Divide your R&D projects into clear phases or parts and keep track of the hours per phase. This provides an overview and helps with approving the subsidy.
How to submit a WBSO application
You can submit a WBSO application every month until the last day via the online portal of the Netherlands Enterprise Agency (RVO). Once approved, the tax benefit will take effect as early as the first day of the following month. For example, do you submit your application on June 30? Then you will benefit from the benefits from 1 July.
Exceptions
There are two important exceptions to this rule:
- Applications after September 30: If you apply after September 30, the benefit will only apply from 1 January of the following year.
- Applications before 1 January: If you want to use the WBSO from 1 January, you must submit the application no later than 20 December. If you do this after December 20, for example on December 21, the benefit will take effect on February 1 at the earliest.
💡 Read more about this important data related to the WBSO.
Here are some of the common pitfalls:
- Late submission: The RVO does not accept applications submitted after the deadline. Make sure your request is complete and on time.
- Incomplete request: Make sure that all documentation, including accurate time registration, is included. An incomplete request can lead to delays or even rejection.
- Forgotten administration: Once you have applied for the WBSO, you must continue to meet the administrative requirements, even after receiving the grant.
Tips for administration in TimeChimp
If you're using a tool like TimeChimp, you can organize your time registration easily and efficiently. Here are some tips for optimizing your R&D administration in TimeChimp:
- Use labels: Create separate labels for your R&D projects so that you can easily distinguish them from other activities. You can read how to create labels in this help article.
- Export to Excel. Do you want to export your WBSO hours to Excel? Here you can read how to easily exports data from TimeChimp to Excel.
- Reports: With TimeChimp, you can quickly and easily generate reports that meet the requirements of the WBSO. This saves you time preparing your application.
Conclusion
The WBSO grant can be a great financial support for companies that innovate, but it does require that you have your time registration in order. By registering daily hours, maintaining a clear project structure and using a tool such as TimeChimp, you can meet the requirements of the RVO and benefit from the WBSO scheme.
Make sure you're on time for the deadline of September 30, 2024 and prevent pitfalls by carefully keeping your records.
