R and D

[NigelJK]

I have been quietly working on an application which I think is commercially viable. Now that I'm up and running as a ltd co contractor is there any way I can claim back as this is essentially R'n'D?

Anyone done it before?

[eek]

I have been quietly working on an application which I think is commercially viable. Now that I'm up and running as a ltd co contractor is there any way I can claim back as this is essentially R'n'D?

Anyone done it before?

No and Yes (which is why I know the answer is NO) HTH

[northernladuk]

I don't think building an app with established tools is really classed as R&D.

Your company or organisation can only claim for R&D Relief if an R&D project seeks to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty - and not simply an advance in its own state of knowledge or capability

I suggest you go read the HMRC page on it to understand it further...

HM Revenue & Customs: Research and Development (R&D) Relief for Corporation Tax

[Clare@InTouch]

As NLUK says, it's quite difficult to get something to qualify for R&D. The process itself is easy enough once you've satisfied the criteria, but you have to be able to prove your claim first which is the tricky part. The HMRC actually has some good guidance on R&D, so start there and then talk to your accountant.

[NigelJK]

Righto will do. Does seem odd that if my BiL (who runs an Engineering company) wants to improve a process he can claim at least some of it back, but I guess this goes under the 'technological uncertainty'

[northernladuk]

Righto will do. Does seem odd that if my BiL (who runs an Engineering company) wants to improve a process he can claim at least some of it back, but I guess this goes under the 'technological uncertainty'

Does it buggery...The whole point of IT is to improve process using known tools and know skills to produce a known process. If what you say was true every single bit of work potentially ever done would come under this. You do need to think sometimes.

“The basic criterion for distinguishing R&D from related activities is the presence in R&D of an appreciable element of novelty and the resolution of scientific and/or technological uncertainty, i.e. when the solution to a problem is not readily apparent to someone familiar with the basic stock of common knowledge and techniques for the area concerned.” 1

The paper includes some supplementary criteria for distinguishing R&D.
What is new or innovative about this project?
Is it seeking previously undiscovered phenomena, structures or relationships?
Does it apply knowledge or techniques in a new way?
Is there a significant chance that it will result in new (extended or deeper) understanding of phenomena,
relationships or manipulative principles of interest to more than one organization
Are the results expected to be patentable?

[kingcook]

I have been quietly working on an application which I think is commercially viable. Now that I'm up and running as a ltd co contractor is there any way I can claim back as this is essentially R'n'D?

Anyone done it before?

If you send me a copy of your design documents and/or source code, I can give you my sincerest and honest opinion...

[Jessica@WhiteFieldTax]

As NLUK says, it's quite difficult to get something to qualify for R&D. The process itself is easy enough once you've satisfied the criteria, but you have to be able to prove your claim first which is the tricky part. The HMRC actually has some good guidance on R&D, so start there and then talk to your accountant.

Excellent advice from Clare and NLUK. Start with the issues of eligibility, and HMRCs web site is comprehensive and accessible in this.

From there the rest is detail, but, alas, most claims fall at the first hurdle.

[NigelJK]

Having now read the gumf I can see where they're coming from. I also note the mere 'innovation' is not enough either.

[Jessica@WhiteFieldTax]

Having now read the gumf I can see where they're coming from. I also note the mere 'innovation' is not enough either.

Yep, R&D tax credits are good politics, but not actually much use at ground level for SMEs.