It is all too easy for UK technology startups to get bogged-down in the red-tape of running a business. Founders are frequently caught up trying to keep on top of books and records to ensure compliance with UK government and HM Revenue & Customs requirements – especially with one eye on a ‘clean’ future exit event.
This compliance distraction is often at the expense of the myriad of government tax incentives that exist to provide financial and cashflow support to UK startups and fast growing clever companies (potentially a significant expense if missed…).
During the early funding rounds, the Seed Enterprise Investment Scheme (‘SEIS’) and Enterprise Investment Scheme (‘EIS’) can provide a much welcomed boost to equity financing – It seems that the attraction of the SEIS and EIS tax incentives have caught the imagination of many tech startup entrepreneurs and business angels alike and we continue to help increasing numbers of start-up companies access and navigate these tax incentives.
”Yet we continue to be surprised by the number of tech company founders who are unaware of the R&D tax credits incentive and the potential positive impact this tax relief could have on the company’s cashflow (potentially year on year)”
The R&D tax incentive can be claimed alongside the SEIS and EIS tax reliefs to help provide a further boost to the cash equity injection. Also, don’t forget that the R&D tax credit relief aims to complement the UK Patent Box tax incentive.
Tech startups can recover up to 33% of the costs that they have incurred on qualifying R&D projects and with the level of innovation across the UK in the tech space, these claims are becoming increasingly commonplace.
So if you are the founder of a tech company in the UK (or from abroad if you have a UK branch), make sure you don’t miss the cashflow funding benefits of the R&D tax credits incentive.