Create R&D process

Finances/r&d-tax-relief.md

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+# R&D Tax Relief
+
+## Background
+
+> R&D reliefs support companies that work on innovative projects in science and technology. 
+It can be claimed by a range of companies that seek to research or develop an advance in their field. 
+It can even be claimed on unsuccessful projects.
+
+> To get R&D relief you need to explain how a project:
+
+> * looked for an advance in science and technology
+> * had to overcome uncertainty
+> * tried to overcome this uncertainty
+> * couldn’t be easily worked out by a professional in the field
+
+Put simply, if your company works on projects that meet some/all of the aspects outlined above, 
+you may be able to claim Corportation Tax Relief
+
+Source: https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief
+
+**DISCLAIMER: this document is written only with dwyl's business in mind. 
+This is NOT financial advice: you are responsible for ensuring your submissions to HMRC are correct for your business.**
+
+## Process
+
+### Outline
+
+Our R&D consultant sends us template spreadsheets which we fill in with the relevant R&D projects we've worked on,
+along with how much staff time and freelancer costs were expended.
+
+We then send this information along with our annual accounts and Corporation Tax computations to our consultants, and they process the claim for tax relief.
+
+**NB: It's best to have your annual accounts ready (but not filed) before you go through the R&D process, 
+so you don't have to pay your accountants to re-file the accounts with your R&D claim**
+
+### Defining Criteria
+
+You'll want to define the criteria for claimable projects in conjunction with your accountants / dedicated R&D consultants
+
+dwyl's agreed criteria are: 
+
++ All projects that are technically challenging (this includes anything we've done in elixir or elm as these are so new)
++ Both client projects and our own projects, both open source and closed
+  + Our clients can also claim for these same projects
++ Any code that we have created for our `learn-...` tutorials, but not the `README` itself
++ Both full time dwylers and freelancers
+* Admin / finance / other non-coding roles count
+
+Unless there have been significant changes to your business since your last claim, it's unlikely you'll have to redefine criteria year-to-year.
+
+### Before you start
+
+You will need...
+
+* For payroll employees, you'll need to know how much the company has paid per employee in 
+**Employer's National Insurance Contributions** (Employer NICs), **Pension Contributions**, and **salaries**
+  * `Xero > Reports > Payroll > Payroll Activity Summary` -  then select the financial period you need (likely to be "last financial year")
+  and select each employee from the dropdown
+![screenshot 2019-02-05 at 14 44 54](https://user-images.githubusercontent.com/11595920/52280854-b4462b80-2954-11e9-9dcc-8629eb48388d.png)
+* A spreadsheet or report with your **freelancer costs** for the relevant financial year (preferably filterable by person and project)
+* A calendar or similar account of how many days each member of staff on payroll worked on each project
+* The template spreadsheets from your consultant. Ours sent two:
+  * Project details
+  * Cost collection
+
+### Project details
+
+The template from your consultants should explain all of this as well.
+
+In response to a query about how much detail is needed, our consultants said...
+
+> you can get away doing detailed descriptions for the main ones with just a few bulleted advancements and uncertainties for the rest
+
+* Make a list of all the projects from the relevant financial year, which you think qualify 
+* Fill in any explanatory sections for each project
+  * Project dates
+  * Objectives: "overall objective of this part of the system and how it helps achieve the overall objective of the solution"
+  * Technology stack / languages / frameworks
+  * Technological advancements
+    * How is your solution technologically more superior to other similar solutions in the market?
+    * What are some of the particular functionalities the solution is capable of achieving that you find to be a unique combination that has not been attempted in the past?
+    * Unique 3rd party integrations, if any
+  * Technological challenges experienced
+    * Performance issues
+    * Browser compatibility issues
+    * Platform/Mobile devices compatibility Issues
+    * Integration Issues with APIs
+    * Multi-formatted data issues
+    * Deployment Issues
+    * Security Issues
+  * "Number of people involved / initial estimation of the percentage of their time spent resolving the uncertainties" 
+  - it might be best to leave this for later; it's easier to produce this after the next section is complete, otherwise you'll be doing it from memory.
+
+### Cost collection
+
+This is the meat of the piece and can get quite fiddly; but if you've got all the info outlined above to hand, 
+it should be much easier than it's been for us so far (with info spread across various spreadsheets and platforms)
+
+Our template is split between "Staffing costs" (i.e. workers on payroll) and "Externally provided workers" (i.e. freelance workers)
+
+* First, get down all the projects you listed out in the other spreadsheet 
+  * For payroll staff, our template has one block per project, broken down by month:
+![screenshot 2019-02-05 at 15 22 28](https://user-images.githubusercontent.com/11595920/52283149-e1490d00-2959-11e9-83cd-cca501b2c7b8.png)
+  * For freelancers it's just a straightforward list with the person's start and end dates, no granular breakdown of time spent
+* Input payroll staff's details:
+  * Name
+  * Start / end date at the company (only if they fall within this financial year, i.e. if the employee left or joined in this period)
+  * Gross Salary
+  * Employer NICs
+  * Pension contributions
+  * Reimbursed travel costs
+  * Bonuses
+* Now go through your `Company Calendar` / whatever time-tracking system you use 
+and input how much time each employee spent on each relevant project, each month. (Yes, this will take a _very_ long time)
+  * Given the nature of our work, someone might be contributing work to a project that isn't captured in your usual time-tracking system
+  You'll need to use your best judgment as to how much time to add on if someone was e.g. doing project management, admin, etc. that wasn't explicitly captured
+  * You _can_ also go through client invoices to sense-check - but bear in mind that extra work is often done on top of what's directly charge to the client
+  * It can also be useful to look through a github user/repo's commit history, to see who's put time down to that project and when
+    * User: https://github.com/**{INSERT_USERNAME}**?tab=overview&from=2017-06-01&to=2017-06-30
+  * Finally, you should write some simple spreadsheet formulae to sum each employee's monthly totals, to check that someone's not working more days than there are in the month
+    * Each month has about 21 working days, so use this as a guide
+    * If people have worked over weekends, this should be captured (but won't affect the results, as we don't pay overtime)
+* Next, you'll do the same thing for freelancers (this is where that filterable spreadsheet from above comes in handy :wink:)
+  * List each project and its freelance personnel 
+  * You only need their start and end dates, so just find their first and last invoice for each project
+  * Now input the sum total of all of their invoices for each project 
+  * Since this is a **cost** collection excercise, your freelancer invoices are an account of your costs - no sense-checking needed here! 
+
+### Wrapping up
+
+We've already mentioned sense-checking against invoices, github etc. 
+Ideally you'd also spend a couple of hours with someone who's close enough to each project to tell you if staff worked on them without it being captured.
+
+Once that's done, send your project list, cost collection sheet, and corporation tax / annual account details to your consultant and let them earn their fee.
+
+### Checklist
+
+* [ ] Fill in list of projects with details on why each one qualifies for R&D relief
+* [ ] Fill in cost collection spreadsheet with details of staff and freelancer time/cost on each project
+* [ ] Send the above to consultants along with corporation tax / annual accounts
+* [ ] Await tax relief paperwork from consultants, then file with HMRC
+* [ ] Receive decision from HMRC
+* [ ] Check you've received £££ relief in your account
+* [ ] Open issue for next year