In the ever-evolving landscape of R&D tax relief schemes, one particular change seems to have slipped under the radar of most R&D claim providers. The introduction of the Additional Information Form has led to over half of the R&D claims submitted in August being rejected due to the failure to complete this initial step.
Since our first article on this topic in April, R&D advisors have gradually come to terms with this new reality. In fact, the Google search volume for “Additional Information Form” has been steadily increasing, highlighting a delayed awareness of this new process.
Understanding the subtleties of the R&D tax relief scheme can be challenging, especially when managing a range of client services. As experts in this arena, our goal is straightforward: to make the process transparent, ensuring that your client’s claims are accurate, timely, and adhere to the latest regulations.
We’re keen on extending our expertise to accountants, arming you with insights and strategies to navigate these regulatory shifts adeptly.
Decoding the Additional Information Form:
From 8 August 2023, the AIF stands central to the R&D tax claim journey. What elements does it encompass?
Basic company information
- The Unique Taxpayer Reference (UTR)
- Employer PAYE reference number,
- VAT registration number
- Standard industrial classification (SIC) code
Contact details
- Senior contacts within the company
- Any agent assisting in the claim.
Accounting details
- The accounting period start and end date corresponding to the tax relief claim.
- The type of relief claimed (SME, RDEC, or both)
Expenditure Breakdown:
- A breakdown between direct and indirect qualifying R&D activities
- Some additional cost categories for accounting periods starting after 1 April 2023 (cloud computing, data licence costs)
Project Specifics:
- Number of projects in the claim and their descriptions (the quantity varies based on the number of projects)
- For 1 to 3 projects, you must describe all the projects you claim that cover 100% of the qualifying expenditure.
- For 4 to 10 projects, you need to tell those projects that account for at least 50% of the total spending, with a minimum of 3 projects described.
- For 11 to 100 (or more) projects, you need to tell those projects that account for at least 50% of the total expenditure, with a minimum of 3 related projects — if the qualifying cost is split across multiple smaller projects, represent the ten largest.
- Total qualifying expenditure for each of the projects.
Project Descriptions:
A standardised set of questions for each R&D project narrative:
- What is the main field of science or technology?
- What was the baseline level of science or technology that you planned to advance?
- What advance in that scientific or technical knowledge did you aim to achieve?
- What scientific or technological uncertainties did you face?
- How did your project seek to overcome these uncertainties?
Supplementary Information:
Beyond the AIF’s core requirements, additional insights can enhance a claim. This may entail providing details of the methodology used to identify and record R&D, biographies of professionals involved, or breakdowns of qualifying costs and apportionments to support the headline figure for each cost category. Submit this additional information with the CT600, acknowledging it in box 657.
Key Reminders:
- Post 8 August 2023, the AIF criteria apply universally.
- Both company reps and agents can submit the AIF with the requisite Government Gateway credentials.
How Can Accountants Pivot?
Amid these fresh complexities, it’s imperative to re-evaluate your approach. HMRC’s keen oversight emphasises precision.
EmpowerRD has proactively geared up for these changes, laying the groundwork for the AIF early on. Our platform has recently undergone significant transformative changes, specifically tailored to cater to the requirements of the AIF. Notably, it now seamlessly and automatically submits the AIF through the Government Gateway, streamlining the entire process. Harnessing technology, our skilled team, consisting of R&D tax claim specialists, ex-HMRC personnel, and ATT-qualified professionals, stands ready to guide you.
Seeking a trusted partner
As the R&D tax relief scheme continually evolves, staying informed is key. With the AIF ushering in a new era of clarity, together, we can ensure these changes become assets, not obstacles.
To delve deeper into these shifts or explore partnerships, reach out to the EmpowerRD team.
