A Better Way To Claim R&D Tax Relief
UK companies are being charged high fees (10–20%) by R&D claim firms that demand many hours of paperwork time when a faster and cheaper option is available.
80% of companies don’t realise they qualify for R&D relief or are underclaiming by not filing optimially — that’s £84 billion ‘left on the table’.
I’m writing this from the perspective of a founder and business owner who has claimed R&D tax credit successfully numerous times, year after year.
I’m not a lawyer, accountant, tax service, or anything like that.
I’ve just had a great experience claiming R&D relief and want to share my story so other business owners can claim back a ton of money from HMRC in the most cost and time-effective manner possible.
If you’re unsure what claiming R&D tax credit means, it’s basically a UK government scheme to reimburse small and medium-sized companies for a portion of their Research and Development expenditure.
Up to 33%! Big money.
When I first heard about this scheme a few years ago I was sceptical.
From an initial review, we certainly qualified as a company for the scheme.
- Incorporated in the UK
- Staff count less than 500
- Turnover lower than €100m
But, I wasn’t sure if our R&D expenditure would qualify.
We were a software development business. I had this idea in my head that our R&D department had to be like SpaceX or something.
As it turns out, that really isn’t the case!
The scheme covers a broad range of R&D projects. But, most companies don’t realise they qualify.
Data from HMRC analysed by tax reclaim specialists suggests 80% of eligible companies that qualify have either not claimed or have under claimed. This amounts to £84 billion ‘unclaimed R&D relief’. Wow!
So long as your company is attempting to solve technical or scientific uncertainties and is introducing new concepts and ideas, you should qualify.
Our R&D expenditure claim for software development did very much qualify, and so does the R&D budgets of thousands of other small and medium-sized companies.
We received a big payment into our company bank account from HMRC quickly after claiming, and in the years following.
Although the scheme is based on Corporation Tax relief, your company does not need to be paying UK corporation tax in order to qualify.
Your business also does not need to be profitable. It can be loss-making, since many companies conducting R&D have not shipped a commercially viable product yet.
The R&D expenditure you can claim for is also generous.
- Employees (including contractors and subcontractors)
- Foreign employees, contractors, and subcontractors
- External software development
- Capital expenditure
- Trial volunteer payments
R&D Claim Consultancy Firms
Here’s a little secret. I didn’t actually prepare the R&D claim myself, and neither did anyone at my company.
Why? We were in growth mode at the time and I wanted to focus my attention on product and sales.
It’s possible to file your own R&D claim, but there’s a lot of nuances to the process that R&D consultancy firms understand way better — particularly when it comes to determining the exact expenditure you can claim for.
Getting this wrong can result in a big underclaim (leaving a ton of money on the table) or rejection from HMRC.
So, we used a specialist R&D consultancy firm and utilized the expertise of their staff to prepare and file our claim.
Overall, I had a great experience using the firm.
They were helpful, knowledgable, and before I knew it HMRC had deposited R&D funds into our company account.
But, it was expensive.
Fees for R&D consultancy firms are usually in the range of 15–20%, uncapped!
And, using them did take up a material amount of time from me and my CTO. There were numerous meetings and reporting requirements that added up to significant hours. We got interrogated pretty hard.
Acceptable, but could be much better!
And, that’s exactly what you can get. Much better…
R&D Claim Tech Disruptor
Recently, I discovered a new tech-first R&D claim service via a top UK angel investor.
The company behind the service, Claimer, have automated most of the claim preparation process with software. So, instead of many labour intensive hours and meetings with consultants to file your R&D claim, it takes just 30 minutes using their website.
Because of this massively increased efficiency, they are able to charge a lot less than traditional R&D consultnacy firms.
Their fee is just 5%! Paid on success only.
And, capped at £10,000.
The genius part is you still get expert input where it matters.
Claimer have experienced R&D claim consultants who write and submit your claim report to HMRC, including all communication dealt with.
They’re also available through live chat to answer questions in real-time.
This expert touch means you can sleep a lot more soundly knowing you didn’t underclaim. No one wants to ‘leave money on the table’ when it’s easily avoidable.
It’s set and forget, meaning once submitted you can crack on with building your business. The cheque from HMRC will land in your bank account shortly thereafter.
The service feels like a natural evolution of the R&D claim space. It’s slick, faster, and cost-efficient.
And, customers that I’ve spoken to had nothing but super positive reviews to share— easy to deal with, quick, reliable.
Their consultants have even managed to identify R&D expenditure that wasn’t previously being claimed for. So, not only is their fee much lower, they are increasing the overall claim value!
If you’re looking to claim R&D relief for the first time or want to switch over from using a traditionally expensive consultancy firm, I have great news!
New customers can use this referral link to get 10% off their first claim with Claimer!
So, that’s like a 4.5% fee instead of 5%!
Just click here to get started.