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

Chris Heath looks at the ‘additional information form’ that is required to be submitted with R&D claims from 8 August 2023, and provides an overview of the implications and practical considerations for companies claiming or considering claiming R&D relief.

Why is it relevant?

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. This can provide valuable funding to R&D operations and a critical lifeline to bootstrapping start-ups and businesses in the early R&D phase.

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.

Over the last year HMRC have significantly increased the frequency of checks amongst 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 as to the information required as part of this form. A substantial level of detail will be needed.

Who does it affect?

All companies submitting an R&D claim from 8 August 2023 will be required to submit an additional information form before the claim is submitted or the claim will automatically be rejected.

What do you need to know?

If you are going to submit an R&D tax relief claim on or after 8 August 2023, planning will be required in advance to complete the additional information form.

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.

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 necessary information.

What should you do next?

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.

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 or email Chris Heath at chris.heath@blickrothenberg.com to discuss the above and 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.