Additional Information Form: everything you need to know

Since 8 August 2023 companies have been required to submit an additional information form (AIF) to support all claims for R&D tax relief. This requirement applies to claims made under both the SME and RDEC schemes, and will continue under both the R&D intensive and merged schemes. The AIF needs to be submitted in advance of your Corporation Tax return containing the R&D claim. Without it HMRC will not be able to process your claim.

What is the Additional Information Form (AIF)?

The additional information form is a mandatory part of the R&D tax claim process with HMRC. It was introduced along with a number of other reforms to R&D incentives to improve compliance and tackle error and fraud.

The form itself contains a series of fields that need to be completed and submitted to HMRC. It provides a framework for required information in support of a claim. There is also scope to provide further information in support of your claim, over and above that included in the AIF. 

It’s worth pointing out that submitting the form does not in itself constitute making an R&D claim, the claim is made via the CT600. Confirmation that the additional information form has been submitted should be made by putting an X in box 657 of the CT600.

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Who needs to complete it?

Any business wishing to claim R&D tax relief will need to complete the form. There are no exceptions. However, it can be completed and submitted by your agent or accountant. 

When the requirements were initially introduced, around 50% of claims were classed as invalid by HMRC due to having no supporting AIF. 

What information is required in the AIF?

Information required on the form includes:

• Company details, including Unique Taxpayer reference (UTR), employer PAYE reference number, VAT registration number and Standard Industrial Classification (SIC) code to indicate the type of business.

• Contact details for the senior contact within the company responsible for the claim and any agent involved in preparing it.

• Accounting period start and end date for which you’re claiming the tax relief (this must match the period shown in your Company Tax Return).

• Confirmation of which relief is being claimed (SME, RDEC or both) and, where applicable, whether the company is exempt from the PAYE cap.

• Summary of qualifying expenditure by cost category, with qualifying indirect activities (QIAs) separated out.

• Project details, including the number of projects being claimed for in the accounting period and descriptions of the activity undertaken (how many descriptions are required will depend on the number of projects being claimed for).

• Total qualifying expenditure being claimed for each project.

• Loss-making R&D-intensive SMEs also need to include details of their total relevant expenditure, as well as the relevant R&D expenditure and total relevant expenditure of any connected companies.

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How many project descriptions are required for R&D claims from 8 August 2023?

The number of project descriptions required varies based on the number of projects included in the claim.

• If the claim includes 1 to 3 projects, details should be provided for all projects.
• If the claim includes 4 to 10 projects, details should be provided for projects giving at least 50% coverage of qualifying expenditure, with a minimum of 3.
• If the claim includes 11 of more projects, details should be provided for projects giving at least 50% coverage of qualifying expenditure, with a minimum of 3 and a maximum of 10.
• In the latter case, if the qualifying expenditure is split across multiple smaller projects, the 10 largest should be described.

What information should be included in project descriptions for R&D claims?

Project descriptions should include:

• The main field of science or technology the project relates to.
• The baseline level of science and technology at the start of the project.
• What advance in that scientific or technological knowledge the company aimed to achieve.
• The scientific or technological uncertainties faced.
• How the project sought to overcome these uncertainties.

Project descriptions for R&D tax claims need to be written in a particular way and highlight key details of your R&D activity. Although there is now more information on the .gov website about what supporting technical information to include, ForrestBrown with its combination of sector specialists, former HMRC inspectors and tax professionals are ideally placed to support you. We have completed additional information forms for clients across a broad range of sectors, with a wide variety of projects. Contact our team to see how we can help.

Can supplementary information be provided and, if so, how should this be submitted?

Additional or supplementary information can be provided over and above what is required for the form. This could include details of the methodology used to identify and record R&D and prepare the claim, biographies of competent professionals, detailed breakdowns of qualifying costs and apportionments to support the headline figure for each cost category.

This additional information can be submitted in a separate report alongside the CT600.

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Do the requirements for additional information apply to R&D claims for all accounting periods?

The requirements for additional information apply to all claims submitted from 8 August 2023 regardless of accounting period.

Who can submit the additional information form for R&D tax claims?

The additional information form can be completed by a representative of the company or an agent acting on its behalf. You will need the Government Gateway user ID and password used when registering for Corporation Tax (for company representatives) or for the agent services account (for agents).

What do I need to do in response to these changes?

You may need to review your methodology and assess how robust your approach is in the context of these new requirements and enhanced compliance activity from HMRC. You should be thinking about this before starting to prepare your R&D claim, to avoid creating more work when it comes to submitting the claim. ForrestBrown is well positioned to help having a track record of preparing detailed project descriptions to support our clients’ claims. We can call on our 130-strong team to provide additional capacity for in-house teams coming to terms with the new requirements.