If you're considering using Tax Cloud for your R&D tax credit claim, you're probably wondering what it'll actually cost. Unlike many consultancies that quote percentages without context or hide fees in the fine print, we believe in complete transparency.
This guide breaks down Tax Cloud's pricing structure, explains when fees apply, and shows you exactly what you're paying for, so you can make an informed decision for your business.
Understanding Tax Cloud's Tiered Pricing Structure
Tax Cloud uses a two-tier percentage model that's designed to be fair for businesses of all sizes. Here's how it works:
First tier: You pay 5% on the first £200,000 of tax benefit you receive.
Second tier: You pay 2.5% on any tax benefit above £200,000.
This tiered structure means larger claims benefit from a lower effective rate, whilst smaller claims remain affordable. It's straightforward, transparent, and directly tied to your success; if you don't receive a tax benefit, you don't pay.
A real-world example
Let's say your R&D tax credit claim results in a £300,000 tax benefit. Here's what you'd pay:
- First £200,000 × 5% = £10,000
- Remaining £100,000 × 2.5% = £2,500
- Total fee: £12,500 + VAT
That's an effective rate of 4.17% on a £300,000 benefit, which is significantly lower than the 15-30% you'd typically pay elsewhere in the industry.
The Minimum Fee Requirement
Tax Cloud charges a minimum fee of £2,750 + VAT. This applies when your total tax benefit is £55,000 or less, as 5% of £55,000 equals our minimum fee.
Why does Tax Cloud have a minimum fee? Preparing a compliant R&D tax credit claim requires the same core work regardless of claim size. Our specialists need to review your projects, assess technical eligibility, work with your team to gather your eligible costs, and prepare HMRC-ready reports. The minimum fee ensures we can deliver the same quality service to every client, whether you're claiming £30,000 or £3,000,000.
For most SMEs who have R&D expenditure between £55,000 and £200,000, your fee will fall within the standard 5% tier rather than triggering the minimum.
What "Tax Benefit" Actually Means
When we talk about tax benefit, we mean the total financial benefit you receive from your R&D claim. This can take different forms:
- Cash payments from HMRC (common for loss-making companies)
- Corporation Tax reductions for the current or previous period
- Offsets against existing HMRC liabilities like PAYE or VAT
Your fee is calculated on the total benefit amount, regardless of how you receive it. If your claim generates a £100,000 cash payment, you pay 5% on that £100,000. If it reduces your Corporation Tax bill by £100,000, the calculation is the same.
Payment Terms and Timeline
Tax Cloud operates on a results-based model with no upfront fees.
We raise your invoice after submitting your claim to HMRC. From that invoice date, you have 45 days to pay. This gives you breathing room to manage your cash flow, especially since HMRC typically processes claims within 40 working days.
Why no upfront fees?
This approach benefits you in several ways. You can plan your cashflow more accurately, knowing the exact fee based on your actual claim value rather than an estimate. The payment timeline aligns with when you'll receive your benefit from HMRC, so you're not paying fees months before seeing any return.
Most importantly, if HMRC rejects your claim—which is unlikely given our 99.8% success rate—you don't pay a fee. However, in the event of a compliance check, Tax Cloud’s team will defend any claim submitted through our platform, working with HMRC to prove your eligibility and get you your entitlement.
What's Included in the Service
Your Tax Cloud fee covers far more than just form-filling. You get:
Expert support from qualified consultants who understand both the technical and financial aspects of R&D claims. Our team includes specialists with industry backgrounds and tax expertise who work together to build robust, compliant claims.
A 99.8% success rate built over five years and thousands of claims. We know what HMRC expects and how to present your innovation clearly.
HMRC compliance check support at no extra cost. If HMRC opens an enquiry into your claim, we'll handle all correspondence and defend your position without charging additional fees.
Access to our software platform including a dedicated portal, Xero integration for seamless data transfer, and a timesheet module to help track R&D activities throughout the year.
Unlimited user permissions so your entire team—finance, technical staff, R&D managers—can collaborate within the platform without incurring per-user charges. These users can have different visibility of the claim, so that sensitive material is only visible to the relevant team.
Comparing Tax Cloud's Pricing to Industry Standards
Traditional R&D tax consultancies typically charge between 15% and 30% of your tax benefit, depending on the size and complexity of your claim. These services are usually full service, handing the claim off nearly entirely to a specialist after providing the project details and costs.
Tax Cloud's tiered model sits well below these industry rates. We achieve this by combining software efficiency with expert advice. Our platform handles data collection and report generation efficiently, whilst our consultants focus on the complex technical assessments and HMRC liaison that require human expertise.
You also won't encounter long-term contracts or hidden fees. There are no monthly subscriptions, no charges for additional users, and no surprise invoices for compliance support. The percentage fee covers everything.
When You Can Cancel
Tax Cloud's commitment point is after the project approval stage. During this initial review, our specialists assess whether your activities qualify for R&D tax relief and whether you have sufficient eligible costs to proceed.
If we determine there are no qualifying projects or costs, you can walk away without paying anything. This transparency ensures you only commit once we've confirmed your claim has merit.
After approval, the next stages will unlock for you to complete the rest of your claim. We'll continue to review your project details and submit it to HMRC. Our fee applies based on the tax benefit you receive.
Tax Cloud ensures that you are only committing to a single claim at a time, assuming you have eligible R&D activities. No rolling contracts, no three-year deals; we want to support you on your journey, not dictate it.
Making an Informed Decision
Tax Cloud's transparent pricing structure is designed to work for businesses at every stage of R&D. Whether you're a software startup claiming £50,000 or an established engineering firm claiming £500,000, you'll pay a fair percentage that reflects the value you receive.
The tiered model means your effective rate decreases as your claim size grows, rewarding businesses that invest heavily in innovation. The minimum fee protects service quality for smaller claims without pricing out early-stage companies. And the results-based approach means you only pay when you succeed.
If you'd like to estimate your potential tax benefit and see what your fee might be, try our R&D tax calculator. Or if you're ready to discuss your specific circumstances, get in touch with our team.
