MVP Development in the UK

About MVP Development

One core loop, built properly, in front of real users in four to eight weeks. Auth, payments and multi-tenant data are done right from the start, so you're not rebuilding at your first hundred customers. We ship our own products too, so we know which corners are safe to cut.

What the engagement includes

• A one-page scope that names the core loop and, just as important, what's left out of version one
• A stack chosen for the next two years, not the next demo: usually Next.js, a Node.js or Laravel API, and PostgreSQL
• Auth, roles and per-customer data isolation built in from the first commit
• Payments working end to end, including failed payments and refunds
• Analytics on the core loop, so you can see whether people actually use the thing
• Full code ownership in your GitHub from day one, and documentation a future hire can pick up
• The same senior engineers from scope to launch, not a sales team followed by juniors

R&D relief, an SEIS round and who owns the code: the UK founder's side of an MVP

For a UK founder the first effect of building an MVP offshore lands on the tax plan rather than the code. Most MVPs are not R&D in the tax sense at all: HMRC's test is whether the project seeks an advance in science or technology by resolving an uncertainty that an expert could not resolve from available knowledge, and assembling an app from established methods rarely does. Where some of the work does qualify, Finance Act 2024 narrowed it for accounting periods beginning on or after 1 April 2024. Under both the merged expenditure credit and the enhanced support for loss-making R&D intensive SMEs, a payment to a contractor counts only if the R&D is done in the UK, or done abroad because conditions it needs are absent here, present where the work happens, and wholly unreasonable to replicate in the UK. HMRC's guidance names the two conditions that can never justify overseas work, the cost of the R&D and the availability of workers, and calls that list exhaustive. A cheaper team, or engineers the UK market cannot supply this quarter, is exactly what the rule excludes, so a model counting on a credit against our invoices is counting on money that will probably not arrive. What can still qualify is work that happens here, such as the time your own UK staff spend resolving the uncertainty, since the overseas restriction reaches contractor and agency worker payments only. The merged scheme also gives the claim to the company that decided the R&D was needed, so the record of what was uncertain should be written and kept by you. The paperwork has fixed dates: a first claim needs a claim notification within six months of the end of the period of account, and the additional information form must reach HMRC before the Company Tax Return or the claim is rejected. Whether any MVP spend qualifies is for your accountant, ideally before the statement of work is signed.

The SEIS round that often pays for the build has its own clock, and the build sits right in the middle of it. A company can raise up to £250,000 under the Seed Enterprise Investment Scheme if, when the shares are issued, it has gross assets of no more than £350,000, fewer than 25 full-time equivalent employees, and a trade carried on for no more than three years. The money must be spent within three years on the qualifying trade, on preparing to carry it out, or on R&D expected to lead to it, and an MVP is usually the largest single line in that spending. That gives our invoices a second job as evidence. The compliance statement, form SEIS1, can only be submitted once the company has traded for at least four months or spent at least 70 per cent of the amount raised, and investors cannot claim relief until HMRC accepts it and issues the SEIS3 certificates. Milestone invoices tied to delivered features, dated and described in the same terms as the business plan, make that 70 per cent straightforward to show. The risk to capital condition is where an outsourced build needs a sentence of explanation. HMRC says it looks at a company's use of subcontractors, among other things, and expects an intention to grow and develop the trade over the long term. An MVP built by an agency sits comfortably with that when the plan shows the company owning the product, the roadmap and the customer relationship, with a route to its own team, rather than a structure in which the supplier effectively is the business. Advance assurance lets you ask HMRC beforehand whether the share issue is likely to qualify, and the application asks for spending broken down by activity, which is the breakdown our proposal already gives. Which scheme fits your round, and whether your trade qualifies, is for your accountant.

The last check is ownership, because an investor's solicitor will ask about it in due diligence and it cannot be fixed cheaply after a falling out. The Intellectual Property Office's guidance is plain that when you commission someone to create a copyright work, the first owner is the person or organisation that created it, not the commissioner, unless you agree otherwise in writing. Where the contract is silent a court may find only an implied licence to use the work for the purpose it was commissioned, which falls well short of owning it. Source code is a copyright work, so that default runs against the founder unless the contract says otherwise. So the agreement should assign the copyright in the code, designs and documentation written for you, in writing, list the open source packages separately because those stay under their own licences, and keep the repository in your organisation's account from the first commit rather than handing it over at the end. The product's name deserves the same care before the launch page goes live. Companies House guidance warns that a company name too similar to another company's name or trade mark may have to change if someone complains, so an accepted company name is not clearance. Since 1 January 2021 an EU trade mark has not protected a brand in the UK, so a founder who filed only at the EU office has nothing here. A UK application is checked against existing marks and published so that others can oppose it, and the IPO says grant usually takes three to four months, which argues for filing when the name is chosen rather than when the app store listing is ready. A founder with no UK address also needs an address for service in the UK, Gibraltar or the Channel Islands to file at all. How the assignment is worded and which classes to file in are for your own counsel.

How we work with UK clients

UK engagements tend to start with procurement questions rather than technical ones. Who holds the data, which law governs the contract, whether you can produce a record of processing if the ICO asks. We answer those in the proposal instead of leaving them to a legal review three weeks in, because that review is where UK projects usually stall.

Invoicing is the other thing worth settling early. We are outside the UK, so services we supply generally fall under the reverse charge and your finance team accounts for the VAT rather than paying it to us. Our invoices say so explicitly. We quote in pounds, the figure does not move with the exchange rate mid-project, and payment by bank transfer avoids the card fees that make a five-figure invoice unnecessarily expensive.

Questions UK clients ask

MVP Development: common questions

Other markets we work in