There has already been considerable change to the government’s R&D tax credit schemes in 2023, following announcements made in the chancellor’s 2022 Autumn Statement and Spring Budget earlier this year.
One change that was due to come into effect in April 2024 has been brought forward to 8th August 2023 which is the R&D additional information form.
It has been and remains good practice to prepare a technical report detailing the nature of R&D projects when submitting a claim for tax credits. This would include a narrative, figures and sometimes diagrams or illustrations. Our team of tax advisers and sector specialists go the extra mile to identify all relevant expenditure, to produce robust and maximised claims.
HMRC’s up front requirements change substantially from 8th August 2023. From this point, they will require more information via an R&D Additional Information Form. Whilst HMRC has never insisted on such information up front, the information requested will be helpful in justifying the full value of a claim.
What is the Additional Information Form in an R&D tax credit claim?
This R&D application form becomes a mandatory part of the R&D claim process from the start of August 2023. In fact, if it is not included in your submission, HMRC will immediately write to you to inform you that they have removed your R&D tax relief claim from your company tax return.
The form itself is substantial. While it will contain much of the information that would be included in a technical report, there may still be value in preparing a report in addition.
The R&D claim form will require you to impart the following information:
- R&D credit form: company details – This includes your business type (e.g. SIC code), VAT number, unique tax payer reference (as per your company tax return) and employer PAYE number.
- R&D form: contact details – Your R&D tax adviser details (like Kene Partners, for instance) and your main internal point of contact responsible for the R&D claim, such as a director.
- R&D full form: accounting period beginning and finish date – This must reflect the R&D relief being claimed and the dates shown in your company tax return.
- R&D tax credit form: qualifying expenditure details – The form will ask about all the usual R&D costs which may be relevant to your claim whether it is the SME scheme, RDEC or both. These include expenditure like staff costs, consumables and subcontractor costs among others. We explain all the eligible R&D expenditure and how it differs between the schemes in our R&D tax credits explained page.
- R&D tax form: qualifying indirect activities – You’ll need to reference any part of the claim relating to indirect qualifying activities also, such as direct supporting activities like maintenance and ancillary activities like leasing laboratories or hiring staff.
How to complete the HMRC R&D Additional Information Form
Equipped with all the above information you will need to complete your R&D project details. HMRC prescribe how many of the projects you need to detail (and how much of the expenditure you must account for) depending on how many distinct projects you performed.
Your description of each of the projects will need to include the main field of science or technology that it relates to, and the baseline level of understanding that you were seeking to advance.
You will then need to outline how you intended to advance this baseline, in a manner that a competent professional working in the field would recognise as a significant improvement.
The description must also cover the scientific or technological project uncertainties that were faced and how you sought to overcome them.
Finally, of course, it is important to state how much R&D tax relief you are claiming, and under which scheme or schemes the claim is being made.
When do I need to submit the Additional Information Form?
You need to include the new R&D additional information form for any claim submitted after 8th August 2023, although HMRC are accepting them prior to this date. The form itself is accessible via the government website.
It is still acceptable to HMRC that you submit your own technical report in addition to the R&D claim form. It may be that it duplicates much of the information, but it may also allow you to convey further relevant information that is excluded by the structure of the R&D tax form.
Your separate R&D report can be submitted by email or online when you complete your company tax return.
How we can help you in completing the Additional Information Form
At Kene Partners we are fully up-to-speed with the new process, having already submitted multiple claims with the additional information form.
Our team of experienced engineers, chartered tax advisers and science and technology PhDs provide the technical know-how to correctly assess and collate all the relevant R&D in your business, without over-claiming. The proof is in our average SME claim percentage, which is nearly a third larger than the industry standard.