Fergus WatsonR&D Senior Financial Consultant
Having started out at one of the Big Four accountancy practices for several years, Fergus has extensive experience with R&D tax claims.
A CT600 is a form that is used by UK companies to file their corporation tax return with HM Revenue and Customs (HMRC). It is used to report the company’s financial information, including income, expenses, and profits, and to calculate the amount of corporation tax that the company owes.
As a form of self-assessment tax, all R&D claims require adjustments to be made to the CT600 in order for the claim to be correctly filed with HMRC. This can be done as part of the original return or through an amendment to the original.
What is a CT600?
A CT600 is the standard HMRC-issue form which is a part of a Company Tax Return; Limited companies use the CT600 to calculate the corporation tax, including any tax amendments, that they owe – it is a fundamental element of a company’s R&D claim.
Amending your CT600 for R&D claims
Making amendments to reduce your corporation tax (CT) liability is quite straightforward; it only requires you to make changes to your tax return, new legislation has been brought in for RDEC claims and payable tax credits to SMEs.
Companies claiming R&D tax credits must now also complete a new supplementary CT600L form. Without this information being correctly filled in, your R&D claim will be automatically rejected by HMRC. If your claim is submitted close to the end of your financial year this is particularly important: you may not receive confirmation of the rejection may until several months after filing. Failure to include the correct forms before the deadline could result in your claim being disqualified.
Whilst most tax software will assist with the preparation of the CT600L, but we’d always recommend seeking advice if you have any doubts. The accurate preparation of an R&D claim with all the supporting documentation requires a detailed knowledge of the processes and the legislation in order to ensure the claim is submitted properly.
SME scheme and CT600L
If your company falls into the SME scheme (which is set to be retired in 2024), then you’ll need to include information pertaining to the SME PAYE/NIC cap as part of the return, including whether the exemption is applicable. You should also indicate whether the tax credit is being used to offset any other liabilities on the return.
RDEC scheme and CT600L
If claiming under the RDEC scheme, a CT600L must always be completed – the 7 steps as part of the RDEC payment mechanism must be completed. You can read more about the RDEC 7 steps here.