How much does custom software cost in the UK?

The short version

Custom software is priced as effort × day rate, plus running costs. Day rates in the UK cluster in a fairly narrow band, so the number that really moves is effort: how many days the scope needs. The best way to control cost is a tight, written scope and a first release that does one job well.

What UK day rates look like

ITJobsWatch tracks advertised contract rates. For the six months to 24 October 2026, its figures for UK software developer contracts were:¹

These are individual contractor rates from job adverts. They are not agency prices. A studio or agency rate also covers project management, design, testing, infrastructure, insurance and the risk of fixed-price work, so it is normally higher than a single contractor's rate. Treat the table as a floor for comparison, not a quote.

Where the days go

A typical custom web application spends effort roughly like this:

Integrations are the usual surprise. Connecting to an accounts package with a good API might take a couple of days. A legacy system with no API can take weeks.

What pushes the number up

• Unclear scope. Every unanswered question becomes a change later, and late changes cost more.
• Many user roles and permissions. Each role multiplies the screens and the tests.
• Integrations with old or poorly documented systems.
• Compliance needs, such as audit trails, data retention or accessibility to WCAG 2.2 AA. These are worth doing and should be planned in from the start.
• Native mobile apps on top of a web app.
• AI features, which need evaluation and human review loops as well as the feature itself.

How to keep it down

1. Write the problem down first, not the solution. One page is enough.
2. Ship a first version that does one job. A narrow MVP that people use beats a broad one that nobody finishes.
3. Buy before you build where something off the shelf does 80% of the job. We will tell you if that is the case.
4. Own your code and hosting so you are not locked in to one supplier.

R&D tax relief: check before you count on it

For accounting periods beginning on or after 1 April 2024, most companies claim under the merged R&D expenditure credit scheme at 20%. Loss-making, R&D-intensive SMEs (with R&D at least 30% of total expenditure) may instead claim enhanced R&D intensive support: a total deduction of 186% and a payable credit worth up to 14.5% of the surrenderable loss.²

The catch: HMRC's guidance is clear that routine software development does not qualify. The work has to seek an advance in science or technology by resolving technological uncertainty.³ Most business applications built with established tools will not meet that test. Some genuinely novel work, often in AI or data, might. Take advice from a specialist before you build a business case around it.

Get a quote for your project

The day rates above are market data, not our prices. We quote every project individually, because the number of days depends on your scope and the systems involved; small, well-defined work can be a fixed price. To talk yours through, book a free first chat.

Sources

1. ITJobsWatch, "Software Developer contracts", UK, six months to 24 October 2026. Rates are from advertised contract jobs. itjobswatch.co.uk ↩

2. GOV.UK, "Research and Development (R&D) tax relief: the merged R&D expenditure credit scheme and enhanced R&D intensive support". gov.uk ↩

3. HMRC Corporate Intangibles Research and Development Manual, CIRD81900 (software). gov.uk ↩