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.
Have a question for our team?
It can be complicated to submit an R&D tax credit claim to HMRC’s exacting standards.
Get in touch with our team of chartered tax advisers, chartered accountants, lawyers, sector specialists, former HMRC inspectors and quality assurance experts to access expert guidance for your claims.