R&D Tax Credits and Relief

[AndrewK]

R&D tax relief is not another mechanism allowing companies to lower the tax obligations. It is there to encourage R&D and people like AtW benefit from it. If you are genuine you would be hiring PHD's and indulging in how R&D into how machine learning can be used to write self driving cars or something like that.

This is exactly what I do (just not for cars).

[AndrewK]

10 years ago a client of mine was claiming it. It was a grey area really as it was a hosting company. The argument was ‘it’s a new way of hosting’. It wasn’t really but it was for the client.
They got away with as
1) they were a company with 20+ staff
2) HMRC were falling over themselves for people to use those credits as there was a shortfall.

I doubt a PSC would get away with it. For a start almost all PSCs work is for a client who owns the IP and therefore would be the party to claim those credits.

Nice try though. Why not just buy the gamer’s PC as Visio needs a decent graphics card. And it’s an asset that will last more than 3 years.

No projects are not for the client.

Let's say hypothetical - PCS with one of directors PhD and active research project, with actual research papers to back it.
Machine learning PCs are not gamer PCs, they can have >6 "graphic cards". And you can even look at multiple PCs with distributed calculation. Not going into technical details, but that cost would be 10-20k for basic cluster.
Maybe it would be beneficial to increase basic salary and claim that for R&D or you can't do that for director?

[northernladuk]

No projects are not for the client.

Let's say hypothetical - PCS with one of directors PhD and active research project, with actual research papers to back it.
Machine learning PCs are not gamer PCs, they can have >6 "graphic cards". And you can even look at multiple PCs with distributed calculation. Not going into technical details, but that cost would be 10-20k for basic cluster.
Maybe it would be beneficial to increase basic salary and claim that for R&D or you can't do that for director?

I'd say get your accountant to run the numbers for you as the drip feed of hypothetical information can only lead to a useless opinion.
He might actually know what a PCS is.

[AtW]

If you've got some grear idea that needs R&D to make you lots of money later then focus on that idea, not R&D tax relief which was intentionally designed not to be claimable by almost any small company

We claim a fraction of our overall R&D and get it audited by Deloitte to be sure it's within the rules, IMHO most small companies claiming it probably fo it wrongly - I expect big crackdown anytime now

[TheFaQQer]

Maybe it would be beneficial to increase basic salary and claim that for R&D or you can't do that for director?

You can be paid whatever the company wants to pay you.

[AtW]

You can be paid whatever the company wants to pay you.

Yes, but HMRC won't be thrilled to see 100% salary of the sole Director used for R&D tax relief

[Lance]

No projects are not for the client.

Let's say hypothetical - PCS with one of directors PhD and active research project, with actual research papers to back it.
Machine learning PCs are not gamer PCs, they can have >6 "graphic cards". And you can even look at multiple PCs with distributed calculation. Not going into technical details, but that cost would be 10-20k for basic cluster.
Maybe it would be beneficial to increase basic salary and claim that for R&D or you can't do that for director?

If the project is not for a client then you’re arguably not a PSC.
You need to understand what a qualifying expenditure is. The project types that qualify are quite wide so as long as you tick the right boxes you’ll likely be Ok.

Read this https://www.gov.uk/guidance/corporat...ment-rd-relief

[SeanT]

Good for you. But I didn't ask for your as usual useless opinion. I tried to find person with actual knowledge.

[AndrewK]

So far impression is that it can be a minefield and more problems in future with HMRC. Definitely not worth for 10k

[AtW]

So far impression is that it can be a minefield and more problems in future with HMRC. Definitely not worth for 10k

Yup!