In line with recent changes to the UK’s Research and Development tax incentives to be effective from 1 April 2023, the company has released guidance about the supplemental information required.
What is the Additional Information
The form requires the following information
- Company Details
- Unique Taxpayer Reference (UTR), this must match the one shown in your Company Tax Return
- Employer PAYE reference number
- VAT registration number
- Business type, for example your current SIC (Standard Industrial Classification) code
- Contact Details
- The main senior internal R&D contact in the company who is responsible for the R&D claim, for example a company director
- Any agent involved in the R&D claim
- Accounting Period Start and End Date
- The accounting period start and end date for which you’re claiming the tax relief, this must match the one shown in your Company Tax Return.
- Qualifying Expenditure Details
- Qualifying Indirect Activities
- Project Details
- The number of all the projects that you’re claiming for in the accounting period and their details.
- If you’re claiming:
- for 1 to 3 projects, you need to describe all the projects you’re claiming for that cover 100% of the qualifying expenditure
- for 4 to 10 projects, you need to describe those projects that account for at least 50% of the total expenditure, with a minimum of 3 projects described
- for 11 to 100 (or more) projects, you need to describe those projects that account for at least 50% of the total expenditure, with a minimum of 3 projects described — if the qualifying expenditure is split across multiple smaller projects, describe the 10 largest
- If you’re claiming:
- Project Description
- Main field of science or technology
- Baseline level of science or technology that the company planned to advance
- What advance in that scientific or technical knowledge did the company aim to achieve
- The scientific or technological uncertainties that the company faced
- How did your project seek to overcome these uncertainties
- Which tax relief you’re claiming for and the amount
- The number of all the projects that you’re claiming for in the accounting period and their details.
FAQ
What is Included in Qualifying Expenditure Details?
Include details of the qualifying expenditure.
If you meet the conditions, you can claim for either or both:
- Tax relief as a small and medium-sized enterprise (SME)
- Expenditure credit as a large company or SME
If you’re claiming for SME Tax Relief, you can claim for:
- Cloud computing costs, including storage, for accounting periods beginning on or after 1 April 2023
- Consumable items, for example materials or utilities
- Data licence costs, for accounting periods beginning on or after 1 April 2023
- Externally provided workers
- Payments to participants of a clinical trial
- Software
- Staff
- Subcontractor costs
If you’re claiming for expenditure credit, you may be able to claim for:
- Cloud computing costs, including storage, for accounting periods beginning on or after 1 April 2023
- Consumable items, for example materials or utilities
- Contributions to independent R&D costs
- Data licence costs, for accounting periods beginning on or after 1 April 2023
- Externally provided workers
- Payments to participants of a clinical trial
- Software
- Staff
- Subcontractor costs
What are Qualifying Indirect Activities?
Include the amount of qualifying expenditure for each project of qualifying indirect activities, that do not directly lead to resolving the uncertainty.
This may include:
- Creating information services for R&D support such as preparing a report of R&D findings
- Direct supporting activities such as maintenance, security, administration and clerical activities and finance and personnel activities, for the share that relates to R&D
- Ancillary activities needed to begin R&D, for example taking on and paying staff, leasing laboratories and maintaining R&D equipment, including computers used for R&D purposes
- Training required to directly support the R&D project
- Research by students and researchers carried out at universities
- Research including data collection to make new scientific or technological testing, surveys or sampling methods, where this research is not R&D in its own right
- Feasibility studies to inform the strategic direction of a specific R&D activity
- This cannot include any costs related to data licensing or cloud computing.
How Do Large Business Customers Handle the Project Details?
For information on how HMRC deals with expenditure credit claims for large business customers, read CIRD85100 Large Business Practice Notes in the Corporate Intangibles Research and Development Manual.
It would be beneficial to include supporting details in a separate R&D report such as:
- The claim methodology
- Use of sampling
- Details of the competent professionals
When You Must Submit
From 1 August 2023, taxpayers will be required to complete and submit an “Additional Information” form to HMRC. This submission will be essential to ensuring your claim is valid. The form must be submitted before the company’s Corporation Tax Return is submitted.
Taxpayers can also submit this form prior to 1 August 2023, if they would like to provide the HMRC with additional information.
What if I Don’t Submit?
If you do not submit the form prior to submitting the Corporation Tax Return, the HMRC will write to you to confirm that they have removed your claim for R&D tax relief from your Company Tax Return.
Who Can Submit
You can complete the additional information form if you’re:
- a representative of the company
- an agent acting on behalf of the company
Who We Are:
Swanson Reed is one of the UK’s leading R&D Tax Relief consultancies. We manage all facets of the SR&ED tax credit program, from claim preparation and audit compliance to claim disputes.If you would like to find out more about how your business could benefit from R&D Tax Credit, contact a Swanson Reed R&D Tax Advisor today.
