Green Jellyfish R&D claims

[ladymuck]

This is an interesting read about a firm that claims fraudulent R&D tax credits on behalf of the less clued-up business owner:

https://taxpolicy.org.uk/2024/08/19/...r-and-d-fraud/

[northernladuk]

Although rather shocking there I don't think there is anything that will surprise most of us that have discussed R&D on here. It's more or less exactly the same as the topics that pop on here except we tend to send the OP away with a flea in their ear and all the facts. GJ haven't and have played the system as badly as some of the posts we have were expecting to do. I knew exactly where this would be going and what points it would fail on before reading the article. As we've seen on here plenty of times it comes down to people making their own mind up about technological advantage and Sophie did exactly what most of our posters have. Think that using an application to achieve an outcome they need is an advancement, and as per every post we've ever had on R&D it wasn't. It was simple re-config of existing COTS or something to create an outcome, not an advancement.

I don't know why it didn't occur to me that there were companies out there like GJ doing this on an industrial scale but it's hardly suprising. I can't believe it's only GJ doing it.

Very sad but most of us on here know it's happening.

[northernladuk]

The HMRC response is interesting and useful though. They highlight in their statement what we tend to have to tell the posters about creating a unique outcome for a company is a config exercise and not creating new tech or advancement. Will be a useful tool to show new posters asking about this to help clarify the grey area most struggle with.

[hobnob]

There are a couple of follow-up blog posts:
How Green Jellyfish’s R&D tax fraud worked (taxpolicy.org.uk)
GDPR tax credit fraud, from the people behind Green Jellyfish (taxpolicy.org.uk)

This seems to be wider in scale than I'd realised, partly because they were targeting companies like care homes (rather than IT contractors) so I wouldn't expect to hear about it.

In theory, I think that a one-person company could legitimately claim R&D expenses. I'm thinking of John Harrison (the "Longitude" guy), who invented a clock that could be carried on a ship and accurately tell the time. In practice, it seems unlikely nowadays.

As the second blog post says, nobody can legitimately claim GDPR tax credits (because they don't exist).

[ladymuck]

Yeah I read the follow ups too. All very interesting stuff. AccountingWeb also featured the original article.

What did annoy me in the AccountingWeb article on this, was that they say something like "if you aren't sure whether you should be claiming R&D tax credits then talk to a professional adviser". Now, these outfits are saying all the things about being FCA accredited and and how they are professional advisers so the naive/greedy person isn't likely to seek a second opinion. What would make me wary is getting a cold call from someone claiming that they know all about my business. This sets off my spider senses every time.