HMRC had seen many errors in research and development (R&D) tax claims. To improve the quality of information they received, HMRC want every R&D tax claim to be accompanied by a completed CT600 and tax computation.
The Change
From 1 April 2019, any amendment to a CT600 (corporation tax return) that involves research and development (R&D) tax relief will need to be accompanied by a full CT600 and computation.
Any claims missing a correctly completed CT600 will be rejected by HMRC.
Why is this Change Needed?
HMRC wants to improve the accuracy of R&D tax relief claims and the quality of the R&D tax industry.
Common errors seen by HMRC include:
- Including non-qualifying activities in R&D claims
- Allowing non-qualifying costs
- Submitting a incorrect or incomplete CT600
- The R&D adviser not having authorisation to amend the CT600 on behalf of the client
Claims submitted with these mistakes or similar may run risk if their claim is rejected.
Changing in Landscape
In recent years, HMRC has changed its approach to R&D tax relief to help:
- eliminate fraudulent behaviour
- reduce inaccurate R&D claims
- ensure high quality of R&D advisers
- benefit the UK
- SME’s claim R&D
Recent changes include:
- A new CT600L form.
- A new PAYE/NIC cap for SME payable credits.
- More HMRC Officers hired.
- Online service for SMEs.
Upcoming Changes
We expect more changes to be implemented in the coming years. As the landscape is changing quickly it is important to work with the right R&D adviser for you.