Cottons Chartered Accountants has saved its clients
£4.4 million using Research & Development scheme

The savings were made over the past year.

You can’t turn on the news without hearing figures, most recently related to the impact that Covid infections are having on our lives – from case numbers to loss of earnings. But here’s a figure that has nothing to do with the ‘C’ word – £4.4 million.

£4.4 million is the amount that Cottons Chartered Accountants has saved its clients in tax by using the Research & Development scheme. As you can imagine, this figure makes our clients very happy!

But if there’s such great savings to be had, why aren’t more businesses utilising the scheme? Well, 4 in 5 don’t actually realise that they’re eligible to claim. Do you?

Am I eligible to claim for Research & Development tax credits?

Research & Development (R&D) tax relief can be claimed by a variety of companies, if they are conducting research or working on a project to develop their field of expertise. Your research or the project that you are working on must be related to your company’s industry.

To claim R&D tax relief you must prove that your project:

  • looked for an advance in science and technology
  • had to overcome uncertainty
  • tried to overcome this uncertainty
  • could not be easily worked out by a professional in the field


Types of Research & Development tax relief

The size of your company will depend on the type of R&D relief that you can claim. If you are an eligible small or medium sized business, you can claim SME R&D relief which will allow you to:

  • deduct an extra 130% of your qualifying costs from your yearly profit, as well as the normal 100% deduction, to make a total 230% deduction
  • claim a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss

If you are an eligible large company, you can claim Research and Development Expenditure Credit (RDEC). This is a tax credit that was previously 11% of your qualifying R&D expenditure up to 31 December 2017. It has now increased to:

  • 12% from 1 January 2018 to 31 March 2020
  • 13% from 1 April 2020


Need Help?

We are Cottons London, small business accountants and branch of top 100 firm Cottons Chartered Accountants. We specialise in support for small businesses and freelancers in London.

If you would like help with this, or anything else with regards tax, accounting or business planning, please contact us today to set up a remote meeting.

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