Research and Development tax relief for FY17/18

[iteles]

We should review our FY17/18 projects whilst they are still fresh in our minds and determine which might be eligible for R&D tax relief, following on from #438.

Tasks

• Identify qualifying projects and populate Project list with basic info @iteles
• Populate Cost Collection sheet with as much info as possible @rub1e
• Discuss %age of time spent by each dwlyer on R&D-qualifying activities and populate Cost collection sheet @rub1e & @iteles
• @iteles Review data:
  • Initial review together - @rub1e and @iteles
  • Review time across projects for @iteles
  • Confirm which months are over or severely under the total working days for that month and double-check
  • Confirm which months are over the total working days for Nelson and double-check (if a person - Nelson - was working weekends, then we can ask the consultants)
  • Fill in Mark's time for any support lent to projects administration
  • @iteles to check Mark's support time on any eligible projects with @nelsonic as they worked together on a few things too which I don't have recorded
  • Check all of May 2017 for all PAYE dwylers (time not being tracked anywhere leading to a makeshift excel sheet in a desperate attempt to capture something when Capturing full time dwylers' time allocation in the short term #363 went nowhere)
  • Check totals across the board to make sure all time is accounted for (i.e. days in the month that were not on eligible projects are accounted for on holidays or non-eligible projects)
  • @rub1e to fill in his time on administrative support for projects (including MW chasing)

• Get end of year tax computations from accountants
• Fill in descriptions for each project
• Decide which project will be the lead
• Email data to consultants

• Email accounts, tax computations and CT600 tax returns
• Consultants to send draft of tax relief paperwork
• Review final draft
• Email accountants the information
• Approve filing
• File for tax relief
• Receive decision on R&D tax relief
• Check & reconcile money received from HMRC against invoices from consultants

[rub1e]

Bumping up to P2 as the consultants are nagging me to do a call about getting the ball rolling on this one

[iteles]

Don’t let them dictate the priority on this @rub1e, I’m keen for us to square away the accounts before we look at this.

[rub1e]

@iteles Totally - actually the main thing was for me to check the contracts and review my mate's reading list before speaking to them!

[rub1e]

Reading for R&D DIY

https://granttree.co.uk/how-to-file-rd-tax-credits-yourself/
https://granttree.co.uk/r-d-tax-credits-guide/
http://www.thisismoney.co.uk/money/smallbusiness/article-4402416/Could-claim-tax-research-development.html
http://www.g2innovation.co.uk/news/2015/7/29/how-long-will-rd-claim-take
https://businessn2k.com/rd-tax-credits-how-make-claim-hmrc/
https://simpleweb.co.uk/an-introduction-to-rd-tax-relief-for-startups/

(for me)

[iteles]

@rub1e As we discussed today, it would be good to just find out from them if the information we need to provide is based on the same templates this year. If so, this is something I can start filling in whilst you're dealing with the fun of the accounts #481 (comment) and we can tag-team this 😉

[rub1e]

OK, I've reviewed the project list and the cost collection spreadsheet and it looks the same as last year (they've even pre-filled a couple of old project from last year)

@iteles the best thing is probably for us to have a quick chat over the phone how to divvy up the sections.

In the meantime, here is a rough task list:

• [ ] Decide which projects are suitable
• Populate spreadsheets with data for each project (ops and dev costs, proportion of time spent on R&D)
• Review data then send to consultants
• Email accounts, tax computations and CT600 tax returns

• Consultants to send draft of tax relief paperwork
• File for tax relief
• Receive decision on R&D tax relief
• Check & reconcile money received from HMRC against invoices from consultants

Documents are saved in finance > Corporation tax > R&D

Tasks have been added to project description

[rub1e]

I've assigned this to you @iteles for the first task, please assign back to me when you're done and I'll pick up the cost collection side of things

[iteles]

@rub1e First pass done! 👍

I've noted down as much as I can in terms of qualifying projects so passing back to you for dates. The company calendar will be your friend but you'll need to check invoices for Healthlocker, SMG, EMF and Quodl for the period between 2017/18 year beginning and the June start of the calendar please!

For the internal projects, I also noted down who worked on them in the column to the far right.

Note: Some of these will be continuations from last year, so you can also copy across the relevant project descriptions etc from the previous year!

[rub1e]

I've done as much of the project list spreadsheet as I can, adding dates, descriptions, and personnel where possible (I actually used github more than the company calendar - tells you exactly who worked on it and when! - just FYI)

I'll give it another once-over before asking @iteles about gaps

Now, regarding the cost collection sheet, I'm confused: since we're entering X staff at Y% figures into the project list sheet, are we then just re-entering that information in granular detail on the cost-collection sheet??

In which case, do we need to make sure they match up?

[rub1e]

For before you start:

• Run a report with a breakdown of Employer's national insurance paid per employee
• Run a report with pension contributions per employee

[rub1e]

Just a little progress update - almost ready to finish with inputting into the cost collection sheet, just waiting to hear back on a couple of queries from the Leyton team and then we'll be ready to populate the %age of people's time spent on each project

[rub1e]

Progress

• All staff details inputted
• All projects inputted into freelancer section
• All freelancers inputted into freelancer section with their project dates (stupidly, I should have done the gross amounts paid out at the same time as the dates)

Questions @iteles :

• Looks like the legacy tab on the company calendar goes back as far as 19th June 2017 - which means I'm missing info for May 2017 and half of June. What did you do before the legacy calendar?
• I couldn't find anything for...
  • TC Roam so I just took all TC invoices in the relevant period - is that correct?
  • dwyl open source Swift app - no external invoices, does that sound right?
  • IOT-decibel - could that be called something else?
  • Datepicker - no external invoices, does that sound right? (It's entirely possible people have just put down "dwyl" as the project)
• I'm waiting for responses from Leyton about the perm staff section - because if we have to break out every single project with days for each staff member, that will be very annoying... (Jenson is on holiday)

[iteles]

In answer to your questions:

• Before the legacy calendar we had a different way of doing it that was not updated from February 2017 onwards when I handed it onwards; this is why I put together the calendar, just so we had something to track it
  • The February to June 2017 void needs to be filled with invoices and my memory 😬
• Projects questions:
  • TC Roam - everything from October 2017 onwards for TC was this project
  • dwyl open source Swift app - All Sohil invoices that should detail this in the invoices, these are the repos:
    • https://github.com/dwyl/learn-apple-watch-development
    • https://github.com/dwyl/time-apple-watch-app
  • IOT-decibel - that is all Naaz, one day a week (PAYE)
  • Datepicker - this was all Daniel, PAYE

[iteles]

For the documentation: We need to get our accounts done and ready as early as possible after financial year end so that computations from these can be sent to the R&D consultants and then we won't need to amend our accounts post facto.

Computations received @rub1e, have added them to the drive.

[rub1e]

@iteles I've filled in the gaps in both the project list and cost collection sheets.

(Only datepicker was missing, as it only had two days of work on it in FY17/18 - the rest of was this FY)

So all that remains is for you/Nelson to go through the project list and add bullet points about uncertainties & challenges - I've highlighted in 🔶 ( 🍊 ) the bits where I think you should put fuller descriptions - for the rest you can just do basic bullets as per this comment

[rub1e]

Having spent so long staring at this spreadsheet, I only just noticed that there's a section for spending on Software Licenses!

So just mentioning that in case we had any relevant costs that could go down there? (But given the open-source nature of our work, it's not likely to be a great deal)

[iteles]

@rub1e None that I can think of. @nelsonic Any on your list?

[rub1e]

@iteles I've added our Sketch subscription to the list.

Just thinking - if ops time counts towards the R&D claim, what about Xero and G-Suite?

I'll sent the consultants an email about this now

[iteles]

@rub1e Xero would make sense because it is how the financials and managed for every project (even internal ones). Let's see what they say 👍

[rub1e]

Unfortunately they say it's too generic an expense for R&D relief (which is kinda fair enough I reckon)

[iteles]

https://granttree.co.uk/how-to-write-a-kick-ass-technical-narrative/

[iteles]

Final doc for review arrived yesterday. Currently being reviewed.

Had a call this morning on various questions around resource allocation and figures (for example, understanding which freelancers were invoicing as themselves rather than through a company of their own).

Requested the more detailed P&L accounts, which I'm sending now.

[iteles]

Filed by the deadline last week.

Need to review when the work was handed to us and check dates against the invoice.

[iteles]

Invoice issued 28-Feb-2020 although work was only completed 4-Mar-2020.

This will ultimately not make a big difference because we won't be paying the invoice until we've received the money from HMRC.

[iteles]

This was completed, accepted by HMRC and received.

The consultants originally sent us the wrong numbers to file - a higher figure - which I caught and questioned on my review (and long before our filing). They had based their original invoice on this higher figure 🙄 so we're now still awaiting a credit note before the invoice is paid. The ball is in their court and the invoice will be paid when that comes in so closing this issue 👍