Bonjour @kate & @chris,
I’m available to define R&D activities related to software forges that could be elligible for tax returns. As mentioned previously, this is something I have already done in the context of another cooperative, in France.
While the particular administrative steps are, without a doubt, different in the UK context, the technical details are not country specific. To summarize, in the French context I went through a two step process last year, all of which was published here. It is all in French but an automated translation will allow you to get a high level view of what it entails. In a nutshell:
- Step 1 is a detailed description of the R&D activities over a period of three years. It is submitted for approval to the French IRS, which approved it a few months later.
- Step 2 is telling the IRS how much paid time is eligible for tax return over the previous year. In 2021 it was ~25,000€ which was re-imbursed mid 2022. A report of the actual R&D activities carried out during the previous year is prepared: it does not need to be submitted but is prepared anyway because it may be required if the IRS decides to verify the facts.
The second step is repeated every year.
As a first concrete action for the benefit of webarchitects, I could draft something by cherry-picking in the existing French technical description and submit that for you to review. I would need links explaining the UK specific legal requirements to read together with a copy of a previous successful tax return that webarchitects submitted for inspiration. We could then have a videoconference to narrow down the details and the timeline. And hopefully that would get webarchitects some funding to work on forges within the next six months.
How does that sound?
Hi @dachary that sounds fine to me
I thought there was a thread on UK R&D tax credits on the CoTech forum a while ago, but I’m afraid I can’t find it, in terms of the UK documentation I guess this would be the place to start:
For a Webarchitects previous tax return best contact our Treasurer, Adam Moran <email@example.com> – he has an account here, @adam but I don’t think he has ever used it.
Thanks for the reference document. I read it, together with the other documents:
@adam It would be great if you could clarify one thing. It is quite clear that, if the company makes profits, R&D can be deduced from the taxes on those profits. What happens if the company does not make profit is unclear though. R&D tax relief: SME scheme: payable tax credit - for surrenderable loss suggests it translates ito a “payable tax credit” but … how does that manifest itself? Is it an amount of money that is paid to the company? Or is it a line of credit that the company can use when and if it makes profit in the future?
In France there exists something similar and it is also worded in a convoluted way. But the bottom line is that if the company does not make profit, the French IRS will effectively wire money to pay for R&D costs, up to a limit.
Thanks in advance for shading some light on this exciting (cough ) topic.
Thanks for that work @dachary.
I wonder if there is also scope for exploring grants, for example I saw this fund is being launched:
I was also wondering if you might be interested in helping us try and get some funding for the OpenNebula plan that was mentioned at our AGM?
I’ll look into it now.
I’m careful not to overextend myself so… maybe. It all depends if there is a connection with forge hosting. I’ve worked with OpenNebula in the past and it is a sensible choice to deploy an infrastructure. Can you explain what you have in mind in more details?
If I’m not mistaken there is nothing at the moment but it will lauch October 6th, 2022. I made a note to look again October 15th, 2022, hoping a call for proposal will be published to apply for a share of the promised £400,000.
I will followup in this topic:
A gentle reminder sent today.
To: Adam Moran firstname.lastname@example.org
Subject: Webarchitects, Gna! and R&D tax relief
I’m available to help with R&D tax relief as explained in this forum topic. I’m engaged into this work as a member of webarchitects and the Gna! collective. I asked a few questions destined to you in this forum post and would be most grateful if you could take time to answer. There is no immediate urgency, of course
 R&D activities related to forges
We discussed this at our management committee today and I’m afraid that it appears that we are not due to make much, if anything, in the way of profit this year so there won’t be the ability to make any claims on tax paid on profits as there won’t be any.
In France, when there is no profit to deduct anything, the IRS pays the company for the amount that could not be deducted. So as to not make R&D exclusive to companies who make a profit. From what I read in the above documents, the same is true for the R&D tax relief in the UK.
In other words, it does not matter that there is a profit or not, you get the tax relief either way.
Thanks @dachary I’ve asked @adam to check this with our accountant.
Quoting the document:
Small and medium sized enterprises (SME) R&D Relief
You can claim SME R&D relief if you’re a SME with both of the following:
- less than 500 staff
- a turnover of under 100 million euros or a balance sheet total under 86 million euros
You may need to include partner and linked enterprises when you work out if you’re a SME.
SME R&D relief allows companies to:
- deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction
- claim a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss
And the following article suggests that it is possible to get cash immediately and how it works.
Thanks @dachary I have asked @adam to follow this up with our accountant and get back to you.
There are quite a few opportunities in the wake of the Gitea Ltd takeover.
No, sorry there are no updates, I’m afraid we are still waiting on a response from @adam.
There are new avenues for R&D thanks to the new Forgejo forge project. Let me know when you have updates and we can figure out what and how.
We are still waiting for @adam to talk to our accountant I’m afraid…