What is the new CT600L supplementary form?

The CT600L is a four-page supplementary form that must be submitted with your Corporation Tax Return when you make your R&D tax credit claim.

The form applies to all companies making claims for a payable tax credit under the small and medium-sized enterprise (SME) or RDEC R&D schemes.

There are still a few boxes on the main Corporation Tax Return (CT600) that need information about qualifying expenditures and tax credits claimed. The new CT600L form is considerably more detailed than it originally was.

The updated CT600L is part of HMRC’s effort to combat fraud related to the R&D scheme. Introducing a more detailed supplementary CT600L aims to give HMRC more relevant information so they can better identify ineligible applicants.

The new detailed form should also help to speed up the processing time of R&D tax credits, which can be delayed if insufficient information is provided. However, as HMRC and businesses move through scheme changes, we anticipate that processing times will be slower. (Here’s where you can see HMRC’s current processing times.)

The amount of information required for R&D tax credit claims on the main Corporation Tax Return was previously restricted to a few boxes. The new CT600L requires considerably more financial data, especially for businesses claiming under the RDEC scheme.

The first page of the CT600L is restricted to company administration information, which should be pulled via the main return. The following two pages are for companies making an RDEC claim, walking them through the seven phases of the tax credit calculation and summarising any carried forward or surrendered amounts.

The final page of the return is dedicated to SME and RDEC claims, which summarises how much credit is available and how it should be utilised if there are additional tax liabilities.

The CT600L form also has a new section, where it asks:

Do you want to claim the exception at s1058D CTA 2009?* (Yes/No)

This relates to the PAYE/NIC cap. This only affects loss-making companies claiming R&D tax credits via the SME scheme and receiving cash back. 

What is the cap?

For all claims having accounting periods beginning on or after 1 April 2021, there is a cap set at 300% of the company’s PAYE/NIC liability, plus £20,000, applied to their SME scheme payable credit claims. Learn more here.

Companies can claim an exemption from the R&D SME PAYE cap

A company can claim an exemption from the R&D SME PAYE cap if it meets the exception in section 1058D of the Corporate Tax Act (CTA) 2009. This is indicated by ticking ‘Yes’ next to ‘Do you want to claim the exception at s1058D CTA 2009?’ in the CT600L form.

This exception applies where the company’s employees are creating, preparing to create or actively managing relevant intellectual property AND the company spends no more than 15% of its qualifying R&D expenditure in the period on connected party subcontractors and externally provided workers.

In this context, relevant intellectual property (or IP) includes patents, trademarks, registered designs, copyrights, design rights, know-how and trade secrets (UK or overseas equivalents). In most cases, this will be IP registered with the Intellectual Property Office, but in all cases, HMRC will expect there to be some paperwork available to support the existence and management of this intellectual property, if required.