Aligning people, purpose, and performance.

As a fully remote, homeworking business that feels strongly about an inclusive, personable culture, we really value our bi-annual strategy days, when the team comes together in London. In June, we enjoyed a day of interactive discussions. The day was designed to allow everyone to have a voice, and to share views and opinions in small working groups. We focused our discussions on strategy, KPIs, and values. The aim? To gather actionable feedback that supports our ongoing journey to build a culture of growth, collaboration, and care.

The Onside strategy is built around four key areas: Financial, Marketing, Operational, and People & Culture. Our overarching goal is to elevate the firm to the level of the UK’s top accounting and tax providers by focusing relentlessly on exceptional service - our key driver of financial success. Closely aligned with this are our KPIs and, reflected in our day-to-day work, our values.

Our values really matter - and most days, our internal Slack channel reflects that. We celebrate both company and individual successes on pretty much a daily basis. When you share positive feedback about a member of the team – chances are it will appear in one of our internal Slack channels dedicated to wins and recognition.

We know that happy, supported teams create the best outcomes for our clients. Our strategy days aren’t just a chance to catch up - important as that is - they’re how we stay aligned, energised, and focused on delivering the kind of service that makes a difference.

The strength of our culture comes through most clearly in the words of our team. Here’s what some of them had to say about working at Onside:

• “Supportive, friendly, and always willing to help” (Alisha)
• “Supported and encouraged to grow both personally and professionally” (Azyen)
• “Everyone takes the time to help each other out” (Will)
• “We don't need to see each every week, to feel like part of the team” (Sam)
• “The team culture is remarkable” (Olivia)

When people feel supported and valued, they thrive. And when our people thrive, so do our clients.

You may be eligible for valuable R&D tax relief.

If your company is investing in innovation, you may qualify for valuable R&D tax relief. The UK’s Research & Development (R&D) tax credit scheme is designed to support companies developing new or improved products, processes, or software. 

Profit making companies can save tax at between 19% - 25%, and loss-making companies can claim a cash credit worth up to 27% of their qualifying R&D spend. 

Keen to find out more - keep reading for key points you need to know to maximise the value for your company. 

What qualifies as R&D? 

To qualify for R&D tax relief, your company must be: 

Seeking an advance in science or technology – your work should contribute to a new or improved product, process, or service, not just for your company, but within your industry. 

Overcoming scientific or technological uncertainty – you must be solving problems where the solution isn’t readily available or known by a competent professional in the field. 

Going beyond routine development – simply upgrading software or refining existing processes without a scientific or technological challenge may not qualify. 

Examples of potentially qualifying R&D work: 

• Developing new software, algorithms, or data processing techniques.
• Creating new materials or engineering solutions. 
• Advancing AI, automation, or machine learning applications. 
• Improving manufacturing processes to make them more efficient.
• Experimenting with new drug formulations or medical devices. 

What costs can be claimed? 

The scheme covers a wide range of R&D-related expenses, including: 

Staff costs – salaries, employers NICs, and employers pensions directly involved in R&D. Expenses reimbursed to employees e.g. travel, may also qualify as R&D staff costs in certain circumstances. 

Subcontractor & freelancer costs – a portion of R&D-related subcontractor, and externally provided worker costs (in most circumstances, for accounting periods starting on/after April 2024, these need to be UK based subcontractors/workers, except where replicating the conditions in the UK is wholly unreasonable). 

Materials and consumables – items used up in development, such as materials for prototypes, water, fuel, and power. 

Software – where it is used in R&D activities. 

Data licenses and cloud computing – including data storage, hardware facilities, operating systems and software platforms. 

Clinical trial volunteers – subjects of clinical trials, for example new drugs or medical techniques.

How to prepare for an R&D claim

HMRC expects companies to provide clear evidence of their R&D activities. Following Guidelines for Compliance (GfC) best practices can help strengthen your claim. The Onside team can provide guidance – book a call with us so we can help support you on your claim.

Keep detailed project records – document the challenges you faced, experiments conducted, and technological advancements achieved. 

Track costs effectively – maintain records of staff time spent on R&D and allocate costs appropriately. 

Gather supporting evidence – meeting notes, test results, and prototypes can help demonstrate your innovation. 

Key risks and common pitfalls 

While R&D tax relief is generous, HMRC has increased scrutiny over claims. Be mindful of: 

Overstating routine work – ensure claims focus on genuine technological or scientific advancements. 

Insufficient documentation – poor record-keeping can lead to reduced or denied claims. 

Subcontractor/external worker complexities – some outsourced work qualifies at a reduced rate, and restrictions on non UK R&D work from April 2024 may mean less qualifying expenditure for the claim. 

Work with Onside 

Navigating R&D tax relief is complex, and the right advisor makes all the difference. At Onside we provide expert, end-to-end support to ensure a robust, compliant, and optimised claim.

Here’s what sets us apart: 

Seamless accounting, tax & R&D support 

Managing R&D claims across multiple advisors can lead to delays, inefficiencies, and missed opportunities. At Onside we integrate accounting, finance, tax advisory, and R&D expertise under one roof - fully analysing expenditure, applying strategic tax planning, and delivering a seamless process. You are involved only when needed, with minimal disruption to your business. 

Specialist tax expertise 

Our CTA-qualified tax specialists and ACCA/CA-qualified accountants oversee your claim, ensuring deep technical knowledge and compliance. Every advisor working on your R&D claim is ATT-qualified or part-qualified in tax. With over 15 years of combined R&D experience, our leadership team, Martin Brennan ACCA - CEO, and Ryan Snape CTA - Managing Director, Onside Tax ensures your claim is handled by experts. 

Comprehensive analysis & high-quality reporting 

A strong R&D claim goes beyond just meeting requirements - it should be thoroughly analysed, well-structured, and backed by clear, technical reasoning. Our team meticulously prepares each claim, providing detailed justifications for qualifying activities and costs. We take pride in producing high-quality, clearly articulated reports that reflect your innovation, making the process smooth and straightforward.

Get in touch today to see how we can help your startup turn innovation into valuable tax relief.

Note: Rates and qualifying criteria are correct at time of publishing, May 2025. Always check with your advisor for the latest information.

Why EMI schemes have tax advantages for employees tax efficiency.

Employees can acquire shares at a fixed price (exercise price) in the future. No tax is payable at the grant or exercise stage, provided the exercise price is equal to the share value at the date of grant. 

When shares are sold, Capital Gains Tax (CGT) applies on any increase in value from acquisition, which is generally much lower than income tax rates. 

If Business Asset Disposal Relief (BADR) is available, CGT can be as low as 10% (based on tax rate in force for 2024/25). 

Key benefits 

Helps retain and incentivise employees by aligning their interests with business growth. Can be cheaper, and more efficient than recruitment processes. 

Can be tailored to specific employees and business goals. 

Potential issues with EMI Schemes 

Valuations and timing 

The lower the share value at the grant date, the better the tax result for employees. Granting share options later, when the company value may be higher, may increase the cost/tax exposure for employees on the scheme. 

EMI schemes are most beneficial when set up/options granted, early in a company’s life, when share value may be immaterial. Funding rounds may impact valuations, so planning is critical. 

Eligibility and Limits 

• Restricted to companies with gross assets under £30m and fewer than 250 employees.
• Certain industries (e.g., accountancy) are excluded. 
• Each employee is limited to options worth £250k. 

Common Alternative Schemes 

Unapproved Share Option Schemes 

May be used for contractors/freelancers, part-time workers, or overseas employees. Not tax advantaged, but more flexible. 

Company Share Option Plans (CSOPs) 

Available for larger companies, but individual limits are lower (£30k per employee).

Growth Shares 

A separate share class with rights tied to specific events (e.g., sale). Typically excludes voting/dividend rights but rewards value creation. 

Will you or your business pay more National Insurance from April 2025? 

Changes to National Insurance (NIC) will take effect from April 2025, impacting employees, employers, and the self-employed. 

Businesses with employees will see the most significant changes. While very small businesses may benefit from National Insurance savings, those with more than a handful of employees will likely pay more in employer NICs. 

Key changes for employers 

From 6 April 2025, the Government will introduce four key changes affecting employer National Insurance contributions: 

Tax increases: 

1. The secondary Class 1 NIC threshold (the level at which employers start paying NICs) will decrease from £9,100 to £5,000 per annum. This means employers will pay NICs on staff earning more than £5,000 a year. 
2. The main employer NIC rate will increase from 13.8% to 15%. This also applies to Class 1A and Class 1B NICs for taxable benefits-in-kind. 

Employment Allowance Enhancements: 

3. All employers will be eligible to claim the Employment Allowance, removing the previous restriction for businesses with an NIC liability over £100,000. 

4. The Employment Allowance will increase from £5,000 to £10,500, reducing employer NIC liabilities for eligible businesses. 

However, single-director companies (where the director is the sole employee earning above £5,000) remain ineligible for the Employment Allowance. 

How this affects your business 

For most businesses with employees, these changes will increase costs. Ignoring the benefit of the increased Employment Allowance, a company employing someone on the UK average salary of £36,000 will pay an additional £938 per year in employer NICs. 

However, smaller businesses may benefit from the increased allowance. For example, businesses with fewer than six employees earning £36,000 each should see an overall NIC reduction. Larger employers or those paying higher salaries will see costs rise as the allowance becomes less impactful. 

That said, with the increased Employment Allowance, it is expected that around 865,000 employers will be exempt from paying NICs, and more than half of employers with NIC liabilities will not be worse off in the next tax year. 

Changes for employees 

Employees will not see direct changes in National Insurance from April 2025. The main employee NIC rates remain unchanged at: 

8% (for earnings between £12,570 and £50,270) 

2% (for earnings above £50,270) 

Changes for the self-employed 

Self-employed individuals may benefit from recent changes: 

Class 2 NICs (previously £3.45 per week) have been abolished for most self-employed individuals earning over £12,570 from 6 April 2024 - a saving of £179.40 per year. 

The Class 4 NIC rate (on profits between £12,570 and £50,270) will drop from 9% to 6%. The rate for profits above £50,270 remains at 2%. 

Impact on UK startups

The Autumn Budget 2024 National Insurance changes will have mixed effects on startups, with both increased costs and potential savings. 

Startups should consider three key changes: 

1. Higher Employment Costs – The increase in employer NICs from 13.8% to 15% raises staffing costs, especially for growing teams. 
2. Lower Earnings Threshold – The NIC threshold for employers will drop from £9,100 to £5,000, meaning NICs kick in sooner. 
3. Employment Allowance Benefits – The increased Employment Allowance (£10,500) and removal of the £100,000 cap could help many startups offset higher costs. 

How can businesses reduce costs? 

While these changes will raise employment costs, strategic planning can help mitigate the impact. 

Options include: 

Salary Sacrifice Schemes – Reducing gross salary in exchange for benefits such as increased pension contributions can lower NIC liabilities. 

Maximising R&D Tax Relief – Startups engaged in innovation can benefit from R&D tax relief, which includes staff costs for qualifying projects. The increased NIC burden could, in turn, increase R&D tax relief claims, helping to offset costs. 

How can Onside help? 

Our expert team of accountants and tax advisors can help you navigate these changes, ensuring your business remains compliant while maximising tax reliefs and allowances. 

We can: 

• Assess your NIC liabilities and explore potential savings. 
• Advise on remuneration structures to reduce employer NIC cost. 
• Identify and support other tax reliefs such as R&D tax credits which might offset the increased costs.