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Claiming R&D Tax Credits: The New Notifcation Forms (2023)

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Are you a UK-based business engaging in research and development (R&D) activities? If so, you may be eligible for R&D tax credits, a government initiative aimed at incentivizing companies to invest in innovation. R&D tax credits allow eligible businesses to claim relief on their Corporation Tax by reducing the amount of tax they pay on qualifying R&D expenditure.

However, to ensure compliance and accurate processing of claims, HMRC has introduced new measures for both first-time claimants and existing claimants from 1 April 2023. This article will discuss the changes and outline the new forms that need to be filled in after 1 April 2023.

First-Time Claimants: The Claim Notification Form

If your business is making an R&D tax credits claim for the first time, you will need to notify HMRC in advance about your claim using the new Claim Notification Form. This form is required for accounting periods beginning on or after 1 April 2023. You will need to complete and submit this form to tell HMRC that you plan to claim R&D tax relief.

Who Must Notify HMRC in Advance About an R&D Corporation Tax Relief Claim?

You must notify HMRC if:

  • You are claiming for the first time.
  • You have claimed for the previous tax year, but you did not submit that claim until after the last date of the claim notification period. (The claim notification period ends 6 months after the end of the period of account).
  • Your last claim was made more than 3 years before the last date of the claim notification period.
When Must Companies Notify HMRC about their R&D Tax Relief Claim?

The latest date that companies must submit the claim notification form is 6 months after the end of the period of account that the claim relates to. If companies fail to submit the form by this deadline, their claim will not be valid.

What Information Is Needed to Complete the Claim Notification Form?

Companies need the following details to complete the claim notification form:

  • The company’s Unique Taxpayer Reference (UTR), which must match the one shown in the Company Tax Return.
  • The main senior internal R&D contact in the company who is responsible for the R&D claim (e.g. a company director).
  • The contact details of any agent involved in the R&D claim.
  • The accounting period start and end date for which the tax relief or expenditure credit is being claimed (must match the one shown in the Company Tax Return).
  • The period of account start and end date.
  • A summary of the high-level planned activities (e.g. if the company has developed software, what it will be used for, to show that the project meets the standard definition of R&D – the company does not need to include evidence on the form, but they will need to provide further information on the additional information form).
Submitting the Claim Notification Form

Once you have completed the claim notification form, you can submit it to HMRC using one of the following methods:

  • A Government Gateway user ID and password.
  • An email address.

If you have previously claimed using the paper Company Tax Return, you should submit a claim notification form to avoid any queries or delays when HMRC processes your claim.

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Existing Claimants: The Additional Information Form

From August 1st, 2023, you will need to submit an additional information form to HMRC to support all your claims for R&D tax relief or expenditure credit. This form needs to be submitted before you submit your company's Corporation Tax Return. Failure to do so may result in your claim for R&D tax relief being removed from your Company Tax Return.

In this section, we'll go into more detail about what the additional information form entails, what information you'll need to provide, and how to submit the form.

What is the Additional Information Form?

The additional information form is a new requirement for existing claimants to provide HMRC with detailed information about their R&D projects and expenditure. The form is meant to supplement the claim notification form and provide HMRC with a more comprehensive overview of your R&D activities and how they qualify for tax relief.

What Information Do You Need to Provide?

To complete the additional information form, you will need to provide the following details:

Company Details:
  • Unique Taxpayer Reference (UTR), which 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
  • Contact details of 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
  • Tax relief you are claiming 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
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
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
person working

Once you have completed the form, you can submit it through the government gateway using your login credentials. It's important to make sure all the information is accurate and complete to avoid any delays or issues with your claim.

If you're an existing claimant, it's essential to note that the additional information form is a new requirement as of August 1st, 2023. Failure to submit the form before filing your Corporation Tax Return may result in the removal of your claim for R&D tax relief.

As with the claim notification form, you can contact HMRC or speak to a professional advisor if you have any questions or concerns about completing the additional information form. It's always better to seek expert advice if you're unsure about any aspect of the R&D tax credit process.

What's next?

Claiming R&D tax credits can be a beneficial and rewarding process for eligible businesses, but it's essential to ensure you comply with HMRC's requirements and submit accurate and complete information.

If you're unsure about any aspect of the R&D tax credit process, don't hesitate to seek advice from a professional R&D Tax Expert - like us here at Accountancy Cloud. With the right support and guidance, you can make the most of this government initiative and receive the financial benefits that your company deserves. Contact us for a free consultation and gain the rewards you deserve.

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