Why do I need a full CT600 and computation for my R&D tax credit claim?

What is the new rule?

From 1 April 2019, any amendment to a Corporation Tax (CT) return that includes a research and development (R&D) tax credit claim will need to be accompanied by a full CT600 and computation.

It means that any R&D tax credit claim must now be accompanied by a full CT600 and computation.

Why have HMRC made this change?

HMRC has made this change to ensure that R&D tax credits continue to serve the purpose they were designed for: to incentivise private sector investment in innovation.

In recent months, we have seen a seismic shift in HMRC’s approach to R&D tax credit claims. HMRC has taken proactive steps to make much clearer what they expect to see in support of an R&D tax credit claim.

This has included:

• the release of new guidance on software R&D;
• a new PAYE / NIC cap for the SME payable credit;
• a new online service for submitting R&D tax credit claims.

This CT600 change is therefore part of HMRC’s wider focus on improving the quality of R&D tax credit claims. Errors in R&D tax credit claims have too often included these types of scenarios:

• Inadequate detail in claims submitted to HMRC, often right up to the deadline for making claims.
• Information provided being deemed ‘incomplete’ and leading to delays in processing the whole CT amendment.
• A lack of communication between a company’s regular agent and specialist R&D agent leading to the submission of incorrect CT self-assessments.
• Specialist R&D agents not having the necessary authority from a company to amend the CT600.

If your business makes these mistakes when it submits a claim, then you risk the claim being rejected.

If you don’t do this, what might happen?

If you do not include a CT600 and computation, you will lose your opportunity to claim.