|From 1 April 2019, R&D tax credit claims must be accompanied by a CT600 and full computation. This is because HMRC wants to address errors it has seen in R&D tax credit claims. Advisers preparing R&D tax credit claims note: a claim missing a correctly completed CT600 will be rejected.|
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.