Tech & SaaS Tax Advisers for US & UK Software Companies

What R&D tax relief can tech and SaaS companies claim?

Research and development relief is often the single largest tax saving available to a software business, yet it is routinely under-claimed or claimed incorrectly. Building new algorithms, resolving technical uncertainty, developing novel architecture, or integrating systems in ways that are not readily deducible by a competent professional can all qualify — the test is technological advance, not commercial novelty.

Where you run R&D across both countries, we make sure the same engineering cost is not double-counted, that contractor and cloud costs are treated correctly in each regime, and that your technical narrative stands up to an HMRC enquiry or IRS review.

How does revenue recognition (ASC 606 / IFRS 15) affect software companies?

Subscription and licence income rarely lands on your bank account and your profit and loss account at the same moment. ASC 606 in the US and IFRS 15 in the UK apply an identical five-step model — identify the contract, identify the performance obligations, determine the transaction price, allocate that price, and recognise revenue as each obligation is satisfied. For most SaaS contracts that means recognising fees ratably over the subscription term rather than on the invoice date.

This creates deferred revenue on the balance sheet, changes reported profit, and can shift taxable income between periods. Multi-element deals — software plus onboarding, implementation, support or usage-based add-ons — need the transaction price split across obligations, and upfront setup fees, discounts and annual prepayments all have to be unwound. Getting this wrong is one of the most common reasons a software company's accounts are challenged during investor due diligence.

We build revenue recognition policies that satisfy both US GAAP and UK/IFRS reporting, reconcile them to your billing system, and make sure the tax computation follows the accounts correctly so you are neither overpaying nor storing up a liability.

How should SaaS founders structure funding, equity and IP?

Funding, equity and intellectual property decisions made in the first eighteen months tend to define a company's tax position for years. In the UK, SEIS offers investors 50% income tax relief on up to £250,000, and EIS offers 30% relief on larger rounds — powerful tools for closing early investment, provided the company qualifies and share classes are structured correctly. We manage advance assurance with HMRC so investors have certainty before they wire funds.

On equity, EMI share options remain the most tax-efficient way to reward a UK team, potentially delivering a 10% capital gains tax rate through Business Asset Disposal Relief on qualifying gains. US-based staff usually receive ISOs or NSOs, and founders holding qualified small business stock may benefit from the Section 1202 gain exclusion. Where a UK company later flips to a US Delaware parent for venture funding, we plan the reorganisation so existing reliefs are preserved rather than lost.

IP ownership sits underneath all of this. Deciding which entity owns the code, how it is licensed intra-group, and whether the UK Patent Box 10% rate can apply to patent-linked profits determines where value — and tax — ultimately lands.

What does US-UK cross-border tax planning look like for tech companies?

A software product sells everywhere on day one, which means most tech companies become cross-border businesses long before they feel ready. The risks are practical: creating a taxable permanent establishment by hiring a salesperson abroad, mispricing intercompany software licences, triggering US state sales tax or UK VAT on digital services, and being taxed on the same profit twice.

The US-UK double tax treaty, foreign tax credits and a defensible transfer pricing policy are what keep profit taxed once, in the right place. We map your entity structure, set intercompany charges that reflect where engineering and IP genuinely sit, and coordinate the US federal, US state, and UK HMRC filings so nothing falls through the cracks as you scale internationally.