Comment by logifail

> 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(!)