Status meeting or steering committee?

[escapeUK]

Client co is trying to get some tax back from HMRC by claiming the development work I have been doing is R&D.

To this end, he wants me to document the meetings which will have taken place but informally throughout 2010, so that he can also claim back the senior peoples time. Most of these would have taken the form of discussions over a cup of coffee, clientco never takes minutes on any meeting throughout the business. Thankfully I have extensive site reports for this period, so can cobble together some bullet points of things that would have been discussed.

But, the last thing I want to do is make them seem like some sort of meetings through which I was being controlled, as I wasnt, especially given they are for HMRC.

Any thoughts guys? Im not sure what to even call these pretend meetings that dont make them sound bad to my IR35 status.

[northernladuk]

Does it say it is R&D in your contract?

If not have a bigger issue that you have been doing work not as detailed in your contract and will be under client D&C IMO.

If they want you to justify your time and effort fine. If they want you to in anyway fudge what you did to look like something else I would try and wash my hands of the whole affair I think.

I would also ask do you think he has a case here. R&D work is very different to development work.

[escapeUK]

I would also ask do you think he has a case here. R&D work is very different to development work.

No I dont, however its not my place to tell a customer of mine what my definition of R&D is, and what monies he should attempt to claim. He's a chartered accountant and I program computers.

My contract clearly states development and systems integration, and thats what I have provided and thats what Im typing up in the notes.

I dont feel directed at all, they know nothing about computer systems only what they want as a concept. I define how I will provide that concept.

[northernladuk]

No I dont, however its not my place to tell a customer of mine what my definition of R&D is, and what monies he should attempt to claim. He's a chartered accountant and I program computers.

My contract clearly states development and systems integration, and thats what I have provided and thats what Im typing up in the notes.

I dont feel directed at all, they know nothing about computer systems only what they want as a concept. I define how I will provide that concept.

Sounds like a solid approach. All i was getting at was the point you are taken on to dev work and the client proves to someone else it was R&D HMRC may take the view in an investigation that you didnt deliver what you were contracted to deliver. Don't know how much of an issue that would cause or if it is irrelevant. Just thinking out loud.

[SarahL2012]

R&D relief

Its quite lucrative, so not surprised the finance team are trying to get the relief.

I don't think it matters what is says in your contract from an IR35 perspective as HMRC's definition of what a company can include as R&D costs covers the following;

Activities which directly contribute to R&D include:
activities to create or adapt software, materials or equipment needed to resolve the scientific or technological uncertainty, provided that the software, material or equipment is created or adapted solely for use in R&D;
scientific or technological planning activities; and
scientific or technological design, testing and analysis undertaken to resolve the scientific or technological uncertainty.


Companies usually have to give a lot of information to HMRC to get approval for the relief so I would check how they plan to refer to you in that information. You're definitely not going to fit the definition of an employee, but there are some issues with companies getting relief for contractors engaged with an agency acting as the intermediary between the company and the individual's personal service company. Given that the finance team will just see the costs from your agent (if that's how you are engaged) they may not be aware that you use a PSC and need to be if they intend to try and get relief for your costs.

Relevant bit from HMRC;
Whether or not the worker is an employee of the staff provider, the legislation is based on a tripartite arrangement between the R&D claimant company, the staff provider and the individual worker. If another company is inserted between the staff provider and the worker, for example if the individual has a personal service company that contracts with the staff provider for the supply of his or her services to the R&D company, then the worker will not qualify as an externally provided worker.

I did some work on this last year for a client of mine and they decided that it was so complex (they'd used consultants & contractors to develop an actuarial model) that they didn't go ahead with claiming the relief. Personally I think it would have been worth the pain, but they were quite a small business and didn't really have the resources to pull together all the info HMRC needed.