Additional information to be submitted with R&D claims from 8 August 2023

Claiming R&D tax relief can offer a cash payment of £18.60 for every £100 spent on qualifying R&D by SMEs (increasing to £26.97 for every £100 spent for “R&D intensive” SMEs), and £16.20 for every £100 for other entities.

To qualify for the relief, the company needs to undertake R&D which seeks to achieve an advance in the relevant field of science or technology. For years this has provided valuable funding to UK companies’ R&D operations, and in many cases has been a critical lifeline to bootstrapping start-ups and businesses in the early R&D phase.

Over the last year HMRC have significantly increased the frequency of checks on R&D claims. This has resulted in more enquiries and many more claims being rejected having been judged not to have met the qualifying criteria.

From 8 August 2023, HMRC will require an ’additional information form’ to be submitted in advance of all R&D claims. HMRC have recently published guidance on the information required to be included in this form. The level of detail required is substantial and represents a sea change in what is required from companies as a minimum in order to submit an R&D claim.

A significant amount of detail will be required including specific, granular information on R&D spend on a project-by-project basis, details of ’qualifying indirect activities’ (activities which form part of a project but do not directly contribute to the resolution of the scientific or technological uncertainty) by project, and a detailed narrative explaining how each of the company’s main projects meet the criteria to qualify for the relief.

Contact details for the main senior internal R&D contact in the company who is responsible for the R&D claim and any agent involved in the R&D claim are also required.

The provision of the information required by the form to HMRC will provide HMRC with insightful detail on each claim up front and should facilitate a more efficient and effective checking system that should reduce the number of enquiries raised.

Companies who have previously claimed R&D tax relief and have submitted a detailed supporting R&D report with their claim may find that the incremental information needed is obtainable with relatively little further work. Companies without this experience will have a lot more work to do to prepare the information.

If you are planning to submit an R&D tax relief claim on or after 8 August 2023, ask your R&D advisor what is needed to complete the additional information form and schedule time to work on this in advance. Input from your R&D technical staff will likely be needed to complete the information required.

Would you like to know more?

Blick Rothenberg has a proven track record of assisting clients in preparing robust, supportable R&D claims with detailed accompanying reports and our team is available to help you plan how to meet the new requirements. Please get in touch with your usual Blick Rothenberg contact or with Chris Heath using the form below to discuss how we can assist with any planning.

*Please note this story was updated 28/07/2023 to reflect the change that HMRC have pushed back the new Additional information form requirement from August 1 as originally stated to August 8.