For the year ending 31 July 2023, an R&D claim will be available for qualifying expenditure and claimed on the supplementary page CT600L.
The current Finance Bill includes two changes that will affect all R&D Claims:
1. A requirement to provide additional information before an R&D claim is made, and
2. A requirement for certain companies to make a claim notification within 6 months after the end of the accounting period for which they want to claim R&D relief.
These changes are intended to enable HMRC to tackle the perceived abuse of the R&D reliefs and to improve the overall compliance.
Additional Information Form
The important thing to note with this additional information form, is that, for any claim made on or after 1st August 2023, it must be submitted to HMRC before the CT600 is filed. If you file the CT600 without the submission of this additional information form, all R&D reliefs will automatically be removed from the CT600.
The additional information form itself, is completed online found at the following link:
https://www.gov.uk/guidance/submit-detailed-information-before-you-claim-research-and-development-rd-tax-relief
The above link provides a complete breakdown of all the information you will need to include, which is quite an extensive list, including all the details of the costs as well significant detail of the projects that were undertaken.
Please also note that you will need to complete box 657 of the CT600 to indicate that you have submitted this form to prevent the R&D claim being automatically removed.
Claim Notification Form
The additional information form is not the only addition HMRC have added to the process. For claims for accounting periods beginning on or after 1 April 2023 there is also a new claim notification form which must be submitted within the “claim notification period”. Your client will not need to complete this for the R&D claim relating to the 31 July 2024 year end, as they will already have made a claim for the 31 July 2023 year end (see (1) below). This claim notification means no company can claim relief unless:
1. the company has already made a valid R&D claim during the period of three years ending with the last day of the claim notification period,
2. the company makes a claim notification in respect of the claim within the claim notification period, or
3. the accounting period in respect of which the additional deduction claim is made falls within the same period of account as another accounting period in respect of which the company has made an R&D claim or a claim notification.
Broadly, new claimants or those who haven’t claimed for three years will need to complete this claim notification form for accounting periods beginning on or after 1st April 2023.
The “claim form notification period” is the period:
• “(a) beginning with the first day of the period of account which is the same as the accounting period in respect of which the claim is made, or within which that accounting period falls, and
• (b) ending with the last day of the period of six months beginning with the first day after that period of account.”
Remember, a “period of account” is the period the accounts are drawn up to. An “accounting period” is the company tax return period. The two are not always the same.
This is a major change to R&D claims and one which will need careful consideration.
Details of the Claim Notification form can be found here: https://www.gov.uk/guidance/tell-hmrc-that-youre-planning-to-claim-research-and-development-rd-tax-relief
This form only requires basic details about the company and the R&D. The main details will be covered in the new R&D additional information form. When submitting the CT600, you will need to complete box 656 to indicate you have filed this.
Summary
Please note, that at least one and sometimes both of these forms may need to be completed in future and will need to be considered with every R&D claim. It seems here that you will need to provide the additional information forms for both periods but not the claim notification forms. You will also need to ensure the necessary boxes within the CT600 are completed before filing. Any failure to comply with these new rules will result in a rejected R&D claim.
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