HMRC have delayed the introduction of the claim notification forms and additional information requirements regarding Research & Development (“R&D”) tax claims by a week due to delays in Finance Bill timetabling.
Originally due to come into effect on 1 August 2023, the Relief for R&D Regulations 2023 will now be put into law on 8th August 2023. This means that you now have until 8th August 2023 to submit your R&D forms if you wish to avoid preparing the additional information form – please see further details below.
The changes that are coming into force regarding R&D tax claims are as follows:-
- For accounting periods starting on or after 1 April 2023:-
- For new R&D claims, a claim notification for R&D tax relief must be provided via an online form and submitted no later than 6 months after the end of the accounting period. Claim notification will only be required for clients that have not submitted an R&D claim before or have not submitted one within the previous 3 years.
- Claims for qualifying expenditure on data licences and cloud computer costs will now be allowed.
- From 8 August 2023, all companies will be required to submit an additional information online form before the company’s corporation tax return containing the R&D claim is submitted. If the CT600 is filed without the submission of this additional information form on or after 8 August, HMRC will automatically remove all R&D reliefs from the CT600 corporation tax return.
The following information will have to be included on the additional information form:-
- Contact details of the main senior internal R&D contact in the company who is responsible for the R&D claim, for example a company director, and / or any accountant or tax agent involved in the R&D claim.
- Value of the qualifying expenditure for tax relief as a small and medium-sized enterprise (“SME”), and the expenditure credit as a large company or SME, and
- A summary of the high level planned activities, for example if you have developed software what it will be used for to show that the project meets the standard definition of R&D.
The changes to the R&D legislation are designed to allow HMRC to more easily identify fraud and errors in claims. According to HMRC figures, nearly 20% of R&D claims are fraudulent. The increase in reporting will also give HMRC a better overall understanding of the claims being made. They will be able to tackle claims with particular features or from particular sectors. We are currently seeing a rise in HMRC enquiries into R&D claims, especially smaller SME claims, even were there has been an established claim over the past few years. To reduce the risk of HMRC opening an enquiry it is therefore essential that all R&D claims submitted are robust and sufficient evidence is supplied to justify the claim being made.
Please do contact your local Whitings office if you have any questions in relation to R&D claims or would like assistance with preparing R&D claims or dealing with an enquiry.
Disclaimer - All information in this post was correct at time of writing.