Reply to: What's this R&D nonsense then?

[WordIsBond]

Sub-contractor costs are certainly something you can look into. I know I did though I cannot recall if I ever actually made a claim as the amounts were small. But of course having sub-contractors is something probably 99% of us don't do?

I wasn't referring to sub-contractor costs we incur, but to the possibility that IT contractor businesses, as sub-contractors of the large business, might be able to make a claim. Like I said, I've never bothered to actually find out what this is and whether it's really a possibility for the typical contractor or not.

[b0redom]

Grant Central.

1 Director, an American lady in her 30's by the name of (DR) Sarah Malter. Her extensive experience of tax planning includes directorships of no less than 3 health and nutrition businesses and one called "The You Club" that lists itself as "Other Services". She also lectures on "the art and science of effective communication".

Grant Central Ltd. was scheduled for Compulsory Strike-Off in June this year, discontinued in September. The strike off entry coincided with the resignation / removal of the only other director and company secretary at the end of June.

Total funds available as at 31st December 2015 - £59,210.

Now given the claims on the website that they have had 200+ clients over 3 years (despite only being incorporated in July 2014) and 100% success rate claiming back up to £60,000+ and being paid 15% on successful claims, I'd have expected them to have a bit more than that.

Draw your own conclusions.

Maybe she just had massive R+D costs?

[d000hg]

Sub-contractor costs are certainly something you can look into. I know I did though I cannot recall if I ever actually made a claim as the amounts were small. But of course having sub-contractors is something probably 99% of us don't do?

[DaveB]

And I'm pretty sure it is utter nonsense, but has anyone else had this?



Link is to Harvey, company Grant Central Ltd.

I'm guessing its some kind of bulltulip R&D claim scam that will inevitably catch up with those who get suckered in a few years down the line.

Grant Central.

1 Director, an American lady in her 30's by the name of (DR) Sarah Malter. Her extensive experience of tax planning includes directorships of no less than 3 health and nutrition businesses and one called "The You Club" that lists itself as "Other Services". She also lectures on "the art and science of effective communication".

Grant Central Ltd. was scheduled for Compulsory Strike-Off in June this year, discontinued in September. The strike off entry coincided with the resignation / removal of the only other director and company secretary at the end of June.

Total funds available as at 31st December 2015 - £59,210.

Now given the claims on the website that they have had 200+ clients over 3 years (despite only being incorporated in July 2014) and 100% success rate claiming back up to £60,000+ and being paid 15% on successful claims, I'd have expected them to have a bit more than that.

Draw your own conclusions.

[WordIsBond]

If you bought an iPhone by the company then it's before tax anyway so your R&D tax credits are not relevant.

This is technically not true. Whether an iPhone would be eligible is dubious, but if it is eligible, the R&D is to your benefit.

If YourCo bought an iPhone, it would reduce your profit by the cost of the iPhone. If you can claim R&D, you can also reduce your profit by 130% of the cost of the iPhone. Details.

If you are developing some kind of a product as your Plan B, anything spent on that may be eligible. That's unlikely to be significant for most.

You MAY be able to make a claim as a subcontractor under the large company scheme. It's not something I've ever looked into (and I should, I suppose, given what I do). So I can't tell you if there is room for contractors to gain some benefit here or not, but I know it is out there.

[d000hg]

I know that the R&D tax relief is genuine however I'm doubtful that its relevant to many freelancers and contractors and I'm dubious that any such claims that the company that emailed me might try and make would be genuine either.

If this was something that some of us should be claiming I would have expected my decent accountant to mention it by now.

Agreed. I've looked into it in regard to plan B and I expect that is the only scope it would affect the vast majority of us here... hence not something that is the norm.

Buying an iPad for developing an app doesn't require R&D relief. You just buy it.

[Maslins]

I've got a few thoughts on this:

1) you can only get an uplift based on amounts actually spent on R&D work. Ignoring definition of R&D for a moment, contractors/freelancers typically spend very little. Therefore at best you're likely to have your ~£8k salary and a few other modest bits and bobs.

2) as others have said, it basically needs to be an internal R&D project. Ie if bigcorp is paying you a day rate to create something for them, it's bigcorp who is incurring the R&D cost and can potentially claim the uplift, not you.

3) if you decide you do want to claim, use a reputable provider (or your existing accountant if they're happy they have the expertise to do it). Otherwise you can end up in the following situation (not dissimilar to users of more questionable schemes):
- adviser gives you a big juicy R&D claim to put on your return,
- you submit with juicy claim, HMRC liability based on that,
- R&D adviser requests payment of their big fee for saving you lots of money,
- 6-12 months later HMRC enquire into the claim, you ask R&D adviser for comment,
- R&D adviser has seemingly disappeared into thin air, phone calls/emails not answered,
- you can't justify the claim, HMRC disallow it,
- you're back at where you would've been without the claim, minus advisers big fee.

[northernladuk]

I know of at least one company who ran those costs through the scheme. Primarily development rather than skilling, but some cross-training certainly.
Legal? The accountant was OK with it. And they've been doing it for nearly 10 years now.

Accountants don't run the company. If the client tells them it's R&D and the befuddles the accountant with science they will say OK. Doing it is fine, surviving an investigation is a different kettle of fish. Mr Upton was fine spending his clients corp tax money ........until he wasn't.

[SueEllen]

I know that the R&D tax relief is genuine however I'm doubtful that its relevant to many freelancers and contractors and I'm dubious that any such claims that the company that emailed me might try and make would be genuine either.

If this was something that some of us should be claiming I would have expected my decent accountant to mention it by now.

They just look at your industry code not realising you are a contractor or freelancer.

[LondonManc]

I know of at least one company who ran those costs through the scheme. Primarily development rather than skilling, but some cross-training certainly.
Legal? The accountant was OK with it. And they've been doing it for nearly 10 years now.

Alarm bells ring whenever I read that word when related to reducing tax bills. Could just be paranoia kicking in but a little bit is healthy anyway.

[TheCyclingProgrammer]

It's genuine. Gordon Brown as chancellor brought it in in the early 2000s (may have been late 90s - I've slept since)

I know that the R&D tax relief is genuine however I'm doubtful that its relevant to many freelancers and contractors and I'm dubious that any such claims that the company that emailed me might try and make would be genuine either.

If this was something that some of us should be claiming I would have expected my decent accountant to mention it by now.

[TheCyclingProgrammer]

Well if you are one man tech company surely any kit you buy with the view that it will be used for R&D purposes then it can be claimed back

So for example fancy writing some apps for apple devices? well you will need to buy an iPhone and iPad to test them on....(development)

However proving that that was what they were used for solely and exclusively may be difficult.

But then you could argue that you used other apple apps so you could get an idea for the look and feel of some apps to give you some idea of what the best option for you app would be (research)

I can see how some of these things might be considered R&D in laymen's terms but I'm not sure they meet the definition of R&D that HMRC uses for tax purposes, which is quite specific.

[Lance]

Development and skilling up is not in them.

I know of at least one company who ran those costs through the scheme. Primarily development rather than skilling, but some cross-training certainly.
Legal? The accountant was OK with it. And they've been doing it for nearly 10 years now.

[northernladuk]

Well if you are one man tech company surely any kit you buy with the view that it will be used for R&D purposes then it can be claimed back

So for example fancy writing some apps for apple devices? well you will need to buy an iPhone and iPad to test them on....(development)

However proving that that was what they were used for solely and exclusively may be difficult.

But then you could argue that you used other apple apps so you could get an idea for the look and feel of some apps to give you some idea of what the best option for you app would be (research)

Not at all. There is pretty clear guidelines about what R&D is. Development and skilling up is not in them.

There is a definition here for example.

Definition of R&D

R&D is defined in accordance with general accounting practice but is further modified by the guidelines produced by the DTI in 2004. In general there must be uncertainty that the final objective can be achieved and there must be an advance in science or technology through the resolution of scientific or technological uncertainty. The knowledge being sought must also not be already available in the public domain.

[Lance]

I'm guessing its some kind of bulltulip R&D claim scam that will inevitably catch up with those who get suckered in a few years down the line.

It's genuine. Gordon Brown as chancellor brought it in in the early 2000s (may have been late 90s - I've slept since)