Since last week, Claimer has stopped taking on new clients, and we'll stop processing claims entirely once our current clients have filed their claims and received their tax relief.
But we're not closing down, we're transforming our business model. This may come as a surprise to many, so this post is designed to explain the story driving this decision, and what's next for Claimer.
Our vision for Claimer
Our ultimate goal has always been to build technology that accelerates innovation globally by making it simple, fast, and inexpensive for small to medium sized businesses to claim the government incentives they are eligible for - whatever country they're in.
Our first target is UK R&D tax relief: abstracting away the cost, pain, and inefficiency of making R&D claims (and dealing with HMRC).
After the success of our prototype, we raised some money, recruited a world-class engineering team, and iteratively built a service that is at least 10x more efficient than a consultancy. With no more than 4 R&D specialists at any one time, we produced and filed as many as 35 bespoke HMRC-compliant claims a month, with a fee no greater than 5% (and capped at £10k).
The challenge
In early 2022, Claimer started to grow more quickly. But there was a trend emerging: it was clear that the best client experiences were those where our expert R&D specialists onboarded and guided clients - not software alone. A combination of software and specialists.
This meant that no matter how efficient our service became, to grow the business significantly would mean having to recruit, train, and manage an ever-increasing team of R&D specialists. The challenge is that as an operational team size increases, the complexity of running it increases exponentially.
My co-founder Andrew and I are engineers. Our skills and passions lie in building fantastic technology that creates massive value in the world, so the prospect of trying to scale into a huge operationally complex people-centric business internationally made us break out into a cold sweat.
Discovering value
After a period of intense brainstorming we developed a new software architecture that could elegantly orchestrate the delivery of a very complex service, like R&D tax credits - at scale.
Rather than trying to replace our specialists, it enhances them. It acts as their operating system, intelligently guiding them on what needs to be done next, automating tasks that machines can do better, and providing tooling to speed up the tasks people do better.
This gives our specialists more time to liaise with clients to ensure an amazing client experience.
Combined with our existing technology and learnings, we built a prototype in a few weeks. It worked exactly as we hoped.
HMRC is a bit of a mess
In March 2022 the Financial Times reported on then-chancellor of the exchequer Rishi Sunak's plans to overhaul the R&D scheme, after being influenced by a Cambridge report suggesting the SME scheme wasn't working very well. Just 3 months later, things started to change very quickly.
The rate of compliance checks ('enquiries') increased, and a deeper investigation into the level of fraud began. This was a good thing.
But due to HMRC’s dated systems and manual processes, and no meaningful budget increase, they don’t have enough resources to both improve compliance and manage the scheme effectively.
In May 2022, HMRC had to halt most tax credit payments for a month to carry out investigations, which caused a backlog and massive delays that have still not been resolved. Case workers got overloaded and stopped replying to queries via email, and agents on the corporation tax line started giving incorrect, inconsistent or vague information.
Then more than 2,000 letters were issued indiscriminately to small businesses accusing them of fraud, asking for a variety of documents within 30 days 'or else'.
This caused mayhem for the entire R&D relief industry.
Enough is enough
Claimer's incredible operations team has been working at 110% throughout this turbulence to ensure our clients are happy, but no matter how much time and effort we put into improving efficiency and creating a fantastic client experience, the end result is entirely reliant on HMRC’s service level.
Claimer's clients have been incredibly patient, understanding, and graceful. Somehow we've maintained 5 stars on Trustpilot and a Net Promoter Score of 65.
But this isn't sustainable, and we need a 10x service to grow quickly. Investing more into the operational part of Claimer further dilutes our focus and resources away from building out our technology that we believe can transform access to government incentives.
A better way
To be successful, startups need to grow quickly, but this is only possible with extreme focus on what delivers the most value.
For Claimer, that’s our technology. Since last week, we’ve started repurposing our core technology to empower other R&D providers. We will work closely with a small number of customers to build a product that we’ve demonstrated can increase the efficiency of preparing R&D claims by at least 10x.
This change has been a painful and difficult one. Shutting down our R&D claims service meant having to layoff much of our super talented team in operations, sales, marketing, and customer success.
We’re currently supporting the leavers by lining them up with new homes. If your business has relevant vacancies, please get in touch with me for details.
What about our existing clients?
Before completely shutting down we will complete in-flight claims and ensure every single client receives their tax relief. If you are a client and have questions or concerns, please contact our support team who will get back to you promptly.
The future
We’ll announce further details of our new chapter soon. If you are an R&D provider that is interested in learning more about our future product, get in touch.
In 2019, Claimer was just me and a laptop. Since then, we grew to 26 talented people, filed 800 R&D claims successfully, and returned £30m to innovative startups and scale-ups.
On behalf of the whole Claimer team, thank you to all our loyal clients and partners over the past 3 years, through the thick and the thin - we salute you!
