Your research and development (R&D) tax credit claim is filed via your Corporation Tax return (CT600). There is no standard format for supplying your supporting information. But HMRC do set out the type of information they would like to accompany an R&D tax credit claim. You should include a breakdown of the qualifying expenditure and a description of your R&D.
Once you have calculated your R&D tax credit benefit, you need to enter this onto your company tax return (CT600). These figures include the enhanced qualifying R&D expenditure and, if relevant, your payable tax credit.
It is important to note that the enhanced qualifying R&D expenditure means your qualifying expenditure, plus the relevant enhancement. For example, for £100 of R&D expenditure enhanced at 130%, your enhanced expenditure would be £230. This is a common error that HMRC sees in R&D tax credit claim filings.
If you are making an R&D tax credit claim and you have already filed a Corporation Tax return for that period, you need to amend the return to include your R&D tax credit claim. You need to file a full amended Corporation Tax return (CT600) and computation to HMRC for the R&D tax credit claim to be accepted.
Although it’s not a legal requirement, HMRC also encourages companies to:
- Tell them why you consider your project(s) to be qualifying R&D; and
- Provide a summary of the costs incurred on R&D and how much relates to each project.
Providing this information is your chance to demonstrate to HMRC that you have given due care and attention to preparing your claim. It also reassures HMRC your claim preparation process is robust and that you have sufficient records to support your R&D projects and costs. Ultimately, it will help you to avoid an enquiry into your R&D tax credit claim.
At ForrestBrown, we benefit from policy-level insight into what HMRC are looking for in support of R&D tax credit claims. As a client of ours, you will benefit from peace of mind that your claim documentation is best suited to HMRC’s requirements.
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It can be complicated to submit an R&D tax credit claim to HMRC’s exacting standards.
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