Ask an accountant: SaaS
The questions software founders actually ask, answered the way they would be answered on a call: the short answer first, then why, then the free tool if there is one. Rates are those applying in 2026/27. US state tax points are orientation, not advice.
26 questions, answered plainly
Five, over and over: MRR and its growth rate, net revenue retention annualised, CAC payback on gross margin, burn multiple, and runway. The demo company would say £40,000 growing 3.2 per cent monthly, NRR 85.5 per cent a year, payback 6.25 months. Have the five on one page, computed from the ledger, before anyone asks.
Over 100 means existing customers spend more each month than churn takes away, so the base grows with no new sales at all. Most SMB SaaS sits below it: the demo runs 98.7 per cent monthly, 85.5 annualised. Below 100 is survivable and common; what kills credibility is quoting the monthly figure as if it were the annual one.
Compound it: the monthly rate to the twelfth power. 98.7 per cent monthly NRR is 85.5 per cent a year, not 100 minus twelve times 1.3. The gap between the right and wrong method is about thirteen points on the demo numbers, and an analyst will recompute it in one cell.
Everything sales and marketing: salaries, commissions, ads, tools, agencies, over customers actually won. The demo's £9,000 a month for nine logos is £1,000 per logo, paying back in 6.25 gross-margin months. The flattering versions leave salaries out of the numerator or use revenue instead of margin in the denominator; diligence reverses both.
As a conversation, yes; as a verdict, no. The demo scores 32.1: 37.1 per cent growth minus 5 per cent EBITDA margin. At small scale the score swings wildly, but computing it forces the one discussion that matters, whether the losses are buying enough growth.
Almost certainly. A 10 per cent rise breaks even at 9.09 per cent of customers leaving because of it; well-handled rises on products in daily use run far below that. The demo's rise lands MRR at £42,680 even with 3 per cent walking. Grandfather existing customers for a quarter if nerves need it, then stop discounting by default.
Only the parts that resolved technological uncertainty: problems a competent professional could not readily solve from public knowledge. New features on established frameworks, integrations and UI work do not qualify, however difficult. The honest test: could your lead engineer name the uncertainty in one sentence and defend it to another engineer?
The merged scheme pays a 20 per cent credit that is itself taxable: on £180,000 of qualifying spend that is £36,000 gross, netting £27,000 for a profit-maker or £29,160 for a loss-maker. A loss-maker spending at least 30 per cent of total costs on R and D reaches ERIS instead, up to £48,546 on the same spend.
First-time claimants, or companies that have not claimed in three years, must tell HMRC they intend to claim within six months of the end of the period of account. It is a short online form and an absolute deadline: miss it and the claim is dead however good the records. Diarise it the week the year end closes.
Contemporaneous ones: the uncertainty and the advance written down during the work, apportionments of each person's time noted monthly, costs by category reconciling to the ledger, and a named competent professional who can discuss it fluently. Reconstructed narratives and hundred per cent apportionments are what enquiries feed on.
Generally not any more. From April 2024, overseas contractor and agency costs are excluded unless the work has to happen abroad for reasons beyond cost or availability, such as regulation or geography. A distributed team shrinks the claim; model it before counting the credit in the runway.
No UK VAT either way, but the paths differ. A US business customer is outside the scope with the reverse charge note and their details kept as evidence. A US consumer pays no UK VAT either, but several states tax SaaS under their own sales tax rules once you pass their economic nexus thresholds, so track sales by state from the first dollar.
A line stating the supply is subject to the reverse charge and the customer must account for VAT in their own country. Charge no UK VAT, validate their VAT number on VIES, and keep the dated confirmation. Without a valid number, treat the sale as a consumer sale and charge their country's VAT through OSS.
The first time you sell to an EU consumer. There is no threshold for a UK business: one Spanish subscriber creates the obligation to charge Spanish VAT, and the non-Union OSS scheme is how you do that with one registration and one quarterly return instead of twenty-seven.
When taxable turnover passes £90,000 in any rolling twelve months, checked monthly, not at year end. Most funded SaaS companies also have a good case for registering before they must: input VAT on hosting, tools and advisers comes back, and B2B customers do not care about the VAT on your invoice.
In a growing number of them, yes: SaaS is taxable in states including New York, Texas and Pennsylvania once economic nexus is established, commonly at $100,000 of sales or 200 transactions in the state. Track sales by state quarterly and register where thresholds pass, or price a merchant of record to carry the whole problem.
On the worked grant, the holder keeps £41,540 under EMI against £29,000 unapproved, and the company avoids £7,500 of employer NIC: £12,540 more per employee on a modest grant. The paperwork is a valuation form, a declaration and an annual return. Few hours have a better hourly rate.
Procedure, almost never intent: grants not notified through the ERS return by 6 July, no agreed valuation on VAL231, working-time declarations never signed, limits breached without noticing. Each undoes the tax treatment for the options it touches, and the buyer's lawyers reprice accordingly. The register and the checklist exist to make each impossible.
By 6 July after every tax year, and yes: once a scheme is registered, nil returns are still returns, with automatic penalties for silence. For options granted from 6 April 2024 the annual return is also where grants are notified, so a missed return can cost EMI status itself, not just a late fee.
No: EMI needs an employee working 25 hours a week or 75 per cent of their working time for the company, and a contractor abroad fails on both counts. Use unapproved options or growth shares for advisers and overseas contractors, and price the tax difference into the grant size deliberately.
Everything except corporation tax itself: the CT600 on time even at nil, VAT, payroll, and the ERS return. Losses only exist once claimed, and they carry forward without expiry to shelter future profits at up to 25 per cent. The R and D credit pays cash in the loss years, which is exactly when it matters.
Annual billing. Cash arrives on day one; revenue is earned monthly over the year; the gap sits as deferred income, £96,000 at the demo company's steady state. Neither statement is lying, and spending deferred cash as if earned is how refund clauses become emergencies.
The company file: cap table, articles, contracts, IP assignments. The numbers: accounts, the metrics waterfall, the model. The tax file: R and D claims with evidence, EMI register with ERS returns, VAT registrations by market. Assembled as you go it is a week's tidying; assembled cold it is the month that kills momentum.
Start the process with at least nine months and ideally twelve: raises take three to six months end to end, and term sheets negotiated with three months of cash read as desperation and price like it. The runway calculator gives the date; the discipline is starting before you need to.
All of it, from exports: MRR from invoices, churn from cancellations, NRR compounded properly, CAC with salaries in, revenue tied to deferred income so billed and earned reconcile. The defence is having computed the numbers the same way all along, from one model they can rerun.
Ready means the metrics page recomputes from the ledger, the data room is assembled, the story survives the five numbers investors check, and the raise is starting with months of runway in hand. The readiness checklist walks the full list; getting funding ready is a quarter's work done calmly or a fortnight's done badly.
No question matches that. Try a shorter word, or ask us directly and it gets added.
Your question is not here? Send it over. This page is built from what software founders actually ask, so a missing question is a gap worth knowing about, and you get an answer either way.