I have a limited company client who sells T Shirts on the internet with designs on created by his staff.
The company employ 7-10 graphic designers to produce these designs to go in an online catalogue about 6000 designs are produced annually. If the costs were included in intangible fixed assets and amortised would this be a tax deductible expense?
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Well they are already a tax deductible expense in the form of wages.
You can't also post those same costs as an internally generated fixed asset. Well, I guess you could, but it wont get you additional tax relief.
6,000 designs per annum. With 10 designers working on them, each produce 600 per year.
Assuming 4 weeks holiday, 48 working weeks means each produce 12.5 designs per week.
Less than half a day per design (especially if they are constantly churning them out) is not going to produce many good designs. I'd value any "asset" created from them accordingly.
If you capitalise the staff costs, you'll get tax relief later than you would if you just wrote them off. Sure, your balance sheet will look stronger but what's the point of this operation ? What are you trying to achieve?
It's a bit like MTD for traders with a £10000 turnover - a madcap idea.