Unsure if you were getting at this too, but software development in the UK can absolutely be ineligible for R&D tax credits yet still require treatment as capital expenditure for tax purposes (and thus not simply fully deductible in year 1 like revenue expenditure) - see [0] from the AAT on this.

Disclaimer: Not an accountant, not your accountant, get professional advice.

[0] https://www.att.org.uk/tax-treatment-software-and-website-co...

Yeah we've helped hundreds of start-ups do their R&D claims, and you have to have specific projects that fall within the definition of "novel" and even then you need to explicitly specify exactly which people worked on it and for how long. It's not a blank cheque at all, and they've tightened the requirements this year on top of that.

> software development in the UK can absolutely be ineligible for R&D tax credits yet still require treatment as capital expenditure for tax purposes

Indeed. Although:

"If businesses develop their own software, the classification of expenditure relating to this (including salaries of in-house IT staff) should be assessed following the same principles. The fact that expenses such as salaries may be recurring does not on its own prevent them from being capital in nature. However, it should be noted that:

The salaries of IT staff will not normally be capital expenditure unless some major new project can be identified. If staff are making only piecemeal changes or minor improvements to software, their salaries are likely to be revenue costs."

Yet from the [US-based] contibutions in the thread it sounds as though _all_ in-house software developers' salaries may _have_ to be treated as capital expenditure for tax purposes in the US.

This seems, frankly, bonkers. I appreciate that portions of the US tax code might well be exactly that(!)

In NL, there's a tax relief for R&D, but it will have to be approved on forehand, and has to be described and estimated in detail, and will be audited. The tax relief gives you a discount on employee taxes.