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Moore Kingston Smith : Significant R&D tax submission changes from 1 August 2023

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What you need to know about R&D claims submitted from 1 August 2023

Significant changes will impact all research and development (R&D) tax submissions (both SME and RDEC R&D tax schemes). Full details are available on the government’s website but Moore Kingston Smith summarise the main points below:

Mandatory online information form

Starting on 1 August 2023, regardless of tax year, an additional online information form is mandatory. Submitting this form before your corporation tax return is vital. Without it, HMRC cannot process your claim and will remove your R&D claim from your corporation tax return.

Information the additional information form will need to include:

  • Company details
    Unique taxpayer reference (UTR) – this must match the one in your company tax return, employer PAYE reference number, VAT registration number, your standard industrial code (SIC) and the accounting period start and end date.
  • Which scheme is being claimed
    SME, RDEC or both.
  • Qualifying expenditure breakdown
    Including total expenditure claimed for each qualifying project and qualifying indirect activities (QIA) for each qualifying project.
  • Contact details
    The main senior R&D contact in your company who is responsible for the R&D claim (e.g. company director) and any agent involved in preparing it.

Detailed project descriptions for HMRC

In addition, HMRC requires detail on project descriptions for the R&D claims, including:

  • The number of all the projects that you’re claiming for in the accounting period and their details.
  • For 1 to 3 projects, full project details that match total qualifying expenditure.
  • For 4 to 10 projects, full project details that reflect at least 50% of the total qualifying expenditure – a minimum of 3 projects is required.
  • For 11 or more projects, full project details that reflect at least 50% of the total expenditure, with a minimum of 3 projects described — if your qualifying expenditure is split across multiple smaller projects, the 10 largest ones are required.

Qualifying project descriptions must include:

  • The main field of science or technology your project relates to.
  • The baseline level of science and technology at the start of your project.
  • What advance in that scientific or technological knowledge your company aimed to achieve.
  • The scientific or technological uncertainties faced.
  • How your project sought to overcome these uncertainties.

Additional information can be provided to supplement what is required for the form. This can include details of claim methodology (including sampling method) and details of your competent professionals.