Forward From Commercial Director, Jamie Watts

If we use the last 18 months as a backdrop, this year has felt like some semblance of calm has returned to our market. The well documented changes to both legislation and HMRC behaviour threw a fair degree of uncertainty to those businesses and advisors who sought to make R&D claims in the previous period. The general consensus is that we have made it through the eye of the storm, where good quality innovation is now being more widely accepted by HMRC, with the caveat that the supporting narrative is well written and captures the key uncertainties in any project.

A large proportion of our clients are equity-backed by investors, be that venture capital, angels or private equity. The venture market in particular went through a major downturn last year thanks to a range of circumstances including a hike in interest rates, a reduction in valuations and a poor M&A market. Many businesses who are absolutely reliant on the next round of funding had to either take capital at a reduced valuation, take on venture debt or slow down in terms of their growth strategy. Fortunately, we have seen far more activity in terms of funding across our client base over the last 6 months, and a general feeling of more positivity across their management teams.

Owner managed SMEs have had had their own woes to contend with: cost pressures that have come about with the increased price of commodities, people and energy to name but a few. Add to this an increased corporation tax burden for many and you can see why many of the strong financial results seen over Covid seem a long time ago now. However, against this tough backdrop, many of our clients are reporting improved in-year numbers, citing streamlining of processes, supply chain and company structure has facilitated a return to favourable operating conditions.

The overriding message here is that our clients continue to demonstrate how resilient they can be. There seems to be a genuine air of optimism, despite ongoing headwinds, that businesses will continue to innovate, grow, and succeed. Our support plays a small part in their respective journeys but, as we in turn scale up our business, we hope to continue to enable their development them to go further, faster.