Cross-Border R&D Tax Relief

Tech startups in London often hire software engineers in Poland, Spain, or Portugal. In the UK, HMRC has specific rules on subcontracted R&D and EPWs (Externally Provided Workers). Under the updated April 2024 HMRC rules, qualifying overseas expenditure is severely restricted. We assess how your overseas developer payroll integrates with your UK tax entity. No complex legal jargon here. We verify whether your remote team members operate through local branches, EOR (Employer of Record) platforms like Deel, or direct freelance contracts. Every detail counts toward your UK corporation tax return Form CT600.

We structure for safety, not just tax cuts. Our compliance team includes three former corporate tax analysts who cross-reference UK R&D guidelines with local European tax codes, specifically the French Crédit d'Impôt Recherche (CIR) and Germany's Forschungszulagengesetz (FZulG). We map every line of code committed to GitHub or GitLab back to specific technical milestones. This provides a clear trail if HMRC or European tax authorities request an audit. We do not use automated scrapers; we perform manual sprint-by-sprint reviews with your CTO.

Let's look at the numbers. In a typical evaluation, we analyze split payroll costs for teams of 7 to 14 engineers. For a software firm with £280,000 in qualifying UK R&D spend and €145,000 in European developer costs, improper allocation can lead to double taxation or missed claims. By documenting the technical direction from London and utilizing precise time-tracking logs, we successfully defended 11 claims under audit during the last tax year. (By the way, we keep our technical interviews with your engineering leads to under 3.5 hours total to minimize distraction from development cycles.)

Our Multi-Jurisdiction Claims Process

Here is our 3-step timeline. First, within 14 business days, we conduct a technical audit of your software architecture, reviewing system diagrams and GitHub repositories. Second, we isolate qualifying payroll and contractor invoices from your ledger, matching them against local European guidelines for the relevant fiscal year. Third, we draft the technical justification report and complete the necessary tax forms for your filing. We average 21 business days from our initial kick-off meeting to the final draft delivery.

Tax claims must align with intellectual property ownership. If your UK parent company holds the intellectual property but your European subsidiary incurs the development costs, the transfer pricing agreement must reflect this. We analyze agreements signed between 2021 and 2024 to ensure they comply with OECD guidelines. Our team reviews these intercompany agreements to avoid withholding tax issues on software licensing. This systematic approach ensures that your intellectual property remains safe and your corporate structure is clean for future investment rounds.

We believe corporate tax services should be predictable, which is why we operate on a fixed-fee basis of £4,800 per annual claim, rather than a variable percentage. This removes any incentive to inflate claims, keeping your relationship with tax authorities completely transparent. If you require support during a formal HMRC enquiry, we provide direct assistance as part of our flat fee. We respond to all urgent enquiries within 4 hours during normal UK working hours.