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Ceri Williams, PhD FCA CQF

Helping tech entrepreneurs build more profitable and strategic businesses so they can scale smarter | Virtual CFO and Founder of Oxwich Accountancy

Ceri Williams, PhD FCA CQF, is the founder of Oxwich Accountancy, where he specializes in helping technology founders optimize their financial strategies and accelerate business growth. His expertise lies in enabling entrepreneurs to realize their visions and achieve commercial success.1

Williams holds a PhD and is a Fellow Chartered Accountant (FCA) as well as a Certificate in Quantitative Finance (CQF), indicating a strong background in both accounting and finance. His work is focused on the intersection of finance and technology, particularly in supporting startups and tech-driven businesses.1

Highlights

Aug 11 · linkedin

Tech founders - how useful have the various Covid-19 financial support measures been to your business?

My general impression is:

🤔 Furlough - useful if sales fell off a cliff and you needed to pause inhouse sales and marketing. Otherwise, remote working was a better option.

😡CBILS - Badly designed. Nobody seems to have been able to get one of these loans, let alone anyone from the tech sector.

😀 Bounce Back Loan - massively useful runway extension. Unless you were early-stage and got caught by the restriction to 25% of annual turnover. Beware the impact on your R&D claim eligibility.

🤔 Future Fund - may have been really useful to those that qualified and could find matching investment. Convertible debt still isn't common in the UK, which I think put many off (investors and founders). Plus the thought of having the UK govt as an equity partner.

🤔 Business Grants and Business Rates Holidays - I think most were excluded because they were linked to business rates and coworking contracts got in the way.

Some of the other things, like deferring tax payments, may have been helpful. But probably didn't make a material impact.

I'd love to know which scheme(s) you found helpful? And, if you chose not to use them (many didn't), why not?

Jun 22 · linkedin

Just a warning to tech founders that your Bounce Back Loan may bounce back in your face ...

HMRC have clarified that the BBL is Notifiable State Aid.

Why is this a problem? The SME R&D tax credit scheme is also Notified State Aid - and you can't use two types of Notified State Aid at the same time.

This is an all-or-nothing rule:

If you use the BBL to fund any of your R&D costs, the whole project is ineligible to SME tax credits. All you can claim is the (less generous) RDEC scheme normally used by large companies.

This differs from other types of State Aid, or any other type of subsidised expenditure, where you just reduce your R&D claim by the subsidy (e.g. the interest you've saved on your BBL).

So what can you do about it?

  1. If you can, use the BBL to fund commercial/admin expenditure, so that your R&D projects are funded from revenue/existing runway.

Then you can still claim SME R&D tax credits as normal.

  1. If you can't, be as granular as possible in defining your R&D projects, so that as few projects as possible are funded by the BBL.

This maximises the amount of R&D you can put through the SME scheme. The rest can be put through the RDEC scheme (better than nothing).

Don't get caught out - if you need help understanding / implementing this - just message

Related Questions

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Ceri Williams, PhD FCA CQF
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Location

Redhill, England, United Kingdom