R&D tax relief process streamlined to enhance compliance

Changes to the Research and Development or R&D tax relief process enable your company to embrace greater compliance and accountability

The key enhancements to the R&D tax relief requirements include:

1. Additional Information Form: Commencing August 1st, 2023, all companies seeking R&D tax relief or expenditure credit must complete and submit a supplementary information form to HMRC. This form aims to provide comprehensive details about the R&D projects and activities underlying the claim.
2. Pre-submission Requirement: To maintain accuracy and accountability, companies must send the additional information form to HMRC before submitting their amended Corporation Tax Return (CT600). If an individual fails to meet this requirement, HMRC will remove the company’s R&D tax relief claims from their Tax Return.
3. Expanded Information Requirement: Claimants must provide more detailed information when filling out the form for additional information. This detail includes their VAT registration number, contact details of the primary senior internal R&D personnel (e.g., company director), and information about any agents involved in the R&D claim.
4. Detailed Claim Preparation: To successfully claim R&D tax relief, HMRC now mandates a more comprehensive set of requirements. This mandate requires taxpayers to provide the total count of R&D projects during the fiscal year, a detailed breakdown of direct and indirect qualifying R&D activities, and submit a more in-depth technical report.
5. Standardised Questions: HMRC has introduced a uniform set of questions that taxpayers must address for each R&D project narrative within the claim. This standardisation aims to improve consistency and accuracy in submissions.

Tailored to the details of research and development

HMRC has focused on three sectors in the revisions to R&D tax relief: technical, financial, and company information.

Specific details such as the primary field of science or technology, the current level of science/technology, goals for advancement, challenges encountered, solutions for problems, claim schemes, and financial data are required, as well as other critical company information and indirect activities like project management for qualification.

Increased accountability in these sectors will prevent misuse, build compliance and create a more streamlined process for all stakeholders. This move benefits not only senior-level oversight, but day-to-day activities through greater transparency.

Counting King has a variety of resources and information designed to aid research and development organisations maximise the resources available to them. You can learn more here.