I'm trying to understand the details of R&D Tax Credits and have some questions - could anyone help please?
Firstly under the expenditure heading Staff Providers, HMRC say ‘ The staff provider needs to contract with the individual whose services they supply’ – what does this mean exactly? If you have the (pretty common) scenario of a company > agency > service company >service company director, and the director of the service company is the technical expert carrying out work on an R&D project for the main company, can the main company claim this as R&D expenditure?
Secondly if work is subcontracted out can this expenditure be claimed, and if so am I correct in thinking that the amount of the claim is 65% of the expenditure involved (I'm not quite sure of the logic behind 65%, is it half of the 130% large company %?).
Thirdly does the 7.5 million Euro upper limit specifically apply to the SME scheme only?
Fourthly Capital Expenditure. If equipment is bought specifically for the R&D project, can 100% of the expenditure be claimed, but it is not claimed as a CA but instead added to the year’s R&D expenditure (so ends up as part of the 200%/220% claim)? This being with the proviso that when the equipment is sold the balancing charge reduces the R&D expenditure in a future year (and what happens if the equipment sale is in a year when there isn’t any R&D expenditure)?
Finally is there a recommended book on R&D Tax Credits?
Thanks for any help.