HMRC’s R&D Additional Information Form: What Innovative Businesses Need to Know

Date: August 3, 2023

From 8 August 2023, HMRC will make it mandatory for all businesses claiming Research and Development (R&D) tax relief to submit an additional information form.

In this article, Nigel Holmes, Director of Tax at Catax (a Ryan company), explains why this change is needed and what businesses need to do to complete a claim.

Why is this change needed?

While this new step requires more administrative work, it is necessary so that HMRC can more easily identify fraud and error in claims. The additional information should help to sift out dishonest advisers who – until 8 August – haven’t included sufficient project information.

This change will also enable HMRC to have a better overall understanding of the claims being made. By having access to clear claim breakdowns and project justifications, rather than just total qualifying expenditure, HMRC can tackle claims with particular features or from specific sectors.

What additional information is needed?

Before the change, the provision of project information and cost analysis was recommended but optional. Now HMRC makes it mandatory for firms to include the following before submitting their Corporation Tax return:

Do all projects need to be described?

What does a business need to describe?

HMRC have provided six key questions that need to be answered in the additional information form.

  1. What is the main field of science or technology?
  2. What was the baseline level of science or technology that the company planned to advance?
  3. What advance in that scientific or technological knowledge did the company aim to achieve?
  4. What were the scientific or technological uncertainties that the company faced?
  5. How did your project seek to overcome these uncertainties?
  6. Which tax relief is your business claiming for and what is the amount?

How should businesses prepare?

Remember that regardless of when the accounting period was, all claims submitted on or after 8 August need to submit the additional information form to HMRC. Businesses should be careful not to confuse the 8 August deadline with any other R&D changes that are due to come in this year or next.

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