In April 2023, the R&D tax relief scheme experienced a range of reforms, including adjustments to R&D tax rates, as well as the addition of new qualifying costs. And more developments are on the way, with HMRC releasing further guidance on the new additional information form, which will be compulsory from 1 August 2023.
From August 2023, the process of filing an R&D claim is changing. HMRC require that all companies submit an Additional Information Form as supporting evidence for an R&D claim before the Company Tax Return. You can view the full guidance here.
It is essentially a replacement for the current R&D claim report. In today’s world, an R&D claim report isn’t required; however, it significantly improves the quality of an R&D claim and reduces the chance of an HMRC enquiry.
Rather than attaching a PDF to your CT600, the Additional Form is an online version of the claim report that gets submitted directly into HMRC’s systems. After 1 August 2023, HMRC will reject any claims not submitted through the Additional Form, which needs to be done before the Company Tax Return.
As per the name (Additional Form), HMRC will require some additional information to process an R&D claim benefit, and this is summarised below. But first, it’s important to understand the current supporting evidence shared with HMRC within a typical claim report.
The additional information form will need to be sent to HMRC before submitting the company’s Corporation Tax Return. If this doesn’t happen, HMRC will write to the company to confirm that they’ve removed the claim for R&D tax relief from the Company Tax Return.
To clarify, if you’ve already submitted your tax return and later submit the additional information form, you’ll need to file an amended tax return. The previous tax return will be replaced by the amended one. This makes it in line with HMRC’s guidance.
For more clarification on this, get in touch with one of our experts today, who will be happy to talk you through the new process.
If you do your claim in-house, ask yourself if the new process is similar to how you’ve been claiming. Perhaps you’ve not even submitted a report to accompany your tax return. If not, it might be time to seek help from R&D specialists. A specialist’s process is more aligned with the new method implemented by HMRC.
If you’ve been working with a provider or accountant, make sure to ask them about the new Additional Information Form. If they appear vague or haven’t heard about it, this demonstrates a lack of knowledge, which isn’t a good sign and could affect your ability to claim.
This is a big step; it doesn’t just change the submission process but also how you collect and link activities.
While the Additional Information Form is a significant change to R&D tax relief, EmpowerRD has been working fast behind the scenes to ensure we’re prepared for the reform.
Since our process is already closely aligned with the new Additional Information Form, we’ve been able to expedite changes to our Platform. As a result, we can cater to the latest requirements, and we continue to update our data collection methodologies to ensure we submit R&D claims that are compliant and optimised in accordance with the changes coming on 1 August 2023.
We’re here to help. Over 1000 UK companies have trusted EmpowerRD’s R&D platform and specialists to help them build optimised, compliant R&D tax claims. Please get in touch with one of our experts today if you have any further questions.