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

by Jenny Tragner

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:

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 only have a short transitional period in which to fix it. For now, you will receive a rejection letter and 30 days to amend and re-submityour claim with a CT600 and computation included.

This transitional period ends on 30 June 2019. After that point, it will just be rejected.

If the statutory deadline passes, you will lose your opportunity to claim.

Speak to the experts

Don’t be caught out by this new rule. ForrestBrown has specialist technical expertise and policy-level insight from HMRC’s R&D consultative committee.

All of our claims are always accompanied by a full CT600 and computation —in fact, they always have been.

Going forward, we will continue to keep our processes in symmetry with HMRC’s expectations. Get in touch if you need help or have a client that does.

 

Email ForrestBrown director Jenny Tragner at: j.tragner@forrestbrown.co.uk

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This article was last updated on 5 April 2019.

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