A Tech Founder’s R&D Tax Journey
Client Name: Sarah (anonymised)
Industry: Software Development & SaaS
Business Type: Owner-Managed Limited Company
Annual Turnover: £680,000
Service: Used R&D Tax Credit | Corporate Tax Returns
Background
Sarah founded a software development company five years ago, building bespoke automation tools for the logistics
sector. Despite investing heavily in product development, writing code, testing algorithms, and iterating on prototypes, she had never claimed Research & Development (R&D) tax relief. Her previous accountant had simply filed her corporation tax return without exploring whether her work qualified.
When Sarah approached Legend Fusions, she was frustrated. She had heard other tech founders speak about significant HMRC repayments through R&D claims and suspected she had been losing out for years. Her records were partially digitised, expenses were loosely categorised, and she had no formal documentation of her development activities.
The Challenge
Sarah faced several compounding problems:
● No prior R&D claims filed across four eligible trading years.
● Inadequate records linking staff costs, software licences, and subcontractor fees to specific R&D projects.
● Uncertainty over which activities legally qualify as R&D under HMRC’s SME scheme.
● Risk of HMRC enquiry if claims were not prepared with proper technical and financial justification.
● Upcoming corporation tax deadline adding time pressure to the process.
Our Solution
Legend Fusions assigned a specialist R&D tax adviser who worked alongside Sarah’s technical team to build a
comprehensive, fully compliant claim. The process involved:
● Conducting a detailed project review to identify qualifying R&D activities within HMRC’s definition of
technological and scientific uncertainty.
● Categorising and substantiating eligible expenditure: staff wages, employer NIC, pension contributions, cloud
computing costs, and contracted R&D payments.
● Preparing a robust technical narrative explaining the nature of the innovation and the specific uncertainties
overcome, the cornerstone of any successful R&D submission.
● Filing amended corporation tax returns for the two most recent eligible accounting periods, maximising the
lookback window permitted under HMRC rules.
● Registering Sarah’s company on HMRC’s new Advanced Assurance notification system to streamline future
claims.
Key Achievements
● £74,200 total R&D tax relief secured across two accounting periods.
● £31,500 cash repayment received directly from HMRC within six weeks of submission.
● Corporation tax liability reduced to nil for the most recent filing year.
● Structured a forward-looking cost-tracking system so future R&D claims can be
prepared efficiently every year.
● Zero HMRC enquiries raised, claim accepted in full on first submission.
Conclusion
Sarah’s case illustrates a pattern Legend Fusions encounters regularly: innovative UK businesses leaving significant tax relief unclaimed simply because it was never raised by their previous adviser. By combining deep technical knowledge with meticulous financial analysis, Legend Fusions delivered a life-changing outcome, reinvesting tens of thousands of pounds back into Sarah’s business and setting up a sustainable framework for annual claims going forward.
Next Steps
Sarah has engaged Legend Fusions on an ongoing retained basis to handle her corporate tax returns, quarterly
management accounts, and all future R&D submissions. Her development roadmap now formally incorporates an R&D cost-tracking protocol recommended by our team.
Client consent has been obtained. The client’s name has been anonymised to protect confidentiality
