Don’t get caught out by R&D relief changes

The Association of Taxation Technicians (ATT) has warned companies claiming R&D tax relief, and their advisers, that they will soon need to provide extra information in order to make a claim.

In today’s Finance Bill¹, the Government confirmed it is bringing forward a requirement to provide additional detail in claim applications, which will now apply to all claims for R&D relief submitted from 1 August 2023. The requirement was previously scheduled to affect claims in respect of accounting periods starting on or after 1 April 2023, which would have been submitted in 2024 at the earliest.

The extra information that will now be required includes breakdowns of qualifying expenditure and descriptions of the R&D work undertaken. The ATT says businesses and advisers will need to be aware of this change or risk missing out on tax reliefs.

Senga Prior, Chair of ATT’s Technical Steering Group, said:

“The acceleration of HMRC’s plans for additional information could catch out businesses and their advisers who are either unaware of the change, or thought they would have longer to prepare for it.

“If the required additional information isn’t sent to HMRC by the time the corporation tax return is filed, any R&D claim will not be allowed. A lack of awareness of this change could therefore see genuine claimants unable to access the tax relief to which they are entitled.”

The requirement for additional information is part of a package of measures intended to improve compliance and reduce abuse in the R&D relief schemes, and will have to be submitted to HMRC using a specific online ‘additional information’ form. This is in addition to any R&D report which would normally be submitted.

Senga Prior said:

“The amount of work required to complete the additional information form should not be underestimated by companies and their advisers.  Although much of the information may already be available in reports prepared by R&D advisers, this will not always be the case.  Even where it is, completing the form in the required way will represent an additional admin burden.

“It’s important that, ahead of August, companies, their agents and R&D advisers agree who will be responsible for submitting the additional information form, especially as failure to do so will mean no tax relief.”