CIRD81800 - R&D tax relief: conditions to be satisfied: SME scheme claims and time limits

CTA09/Ss 1044(6)

R&D tax reliefs are not a mandatory adjustment to the profit of an accounting period. A claim must be made for the additional deduction and a further claim for the payable tax credit.听

Claims must be made, amended or withdrawn in the company tax return.听

Claim requirements for accounting periods beginning on or after 1 April 2023听

Companies will need to鈥�submit听additional information via this online form听(CIRD182000)鈥痶o support their claim (贵础98/厂颁贬18/笔补谤补.鈥�83EA)and鈥痬ay need to鈥�pre-notify听to鈥�(CIRD183000)鈥疕MRC of their intention to claim (CTA09/S1142A).鈥疘f either of these requirements is not鈥�complied with, the claim will be invalid.鈥疨lease note鈥�in particular that鈥痚ven where a claim supported by AIF to one scheme has been鈥�submitted鈥痠n an original return, if the company wishes to claim under the other scheme in an amendment,鈥痑鈥痭ew AIF will be鈥�required.听

Claims are made in the Company Tax return or鈥痓y amending the return鈥�(贵础98/厂颁贬18/笔补谤补.鈥�83叠). The return or amendment must include鈥痑ccounts鈥�(original return only), computations鈥�(which must reflect the claims made),鈥痑 completed CT600 and, if there is a claim for payable tax credit,听a completed CT600L.鈥� Both original returns and amendments must be made through the Corporation Tax Online Service (also known as the COTAX gateway - details are in the COTAX Manual at听COM130001).鈥�听

The requirement for the additional information form, pre-notification and gateway submission of amendments鈥痠ncluding R&D claims鈥痗ame into force from 8 August 2023,鈥痷nder HMRC鈥�directions鈥痬ade under鈥�听as amended by .听

The amount of鈥痳elief and鈥痗redit鈥痗laimed鈥痬ust be quantified鈥痺hen the claim is made鈥�(贵础98/厂颁贬18/笔补谤补.鈥�83C).鈥疘f an incomplete return is received, or if the amount of the鈥痳elief or鈥痗redit is not quantified, there is no valid claim.听
听
Additionally, amounts of SME relief must be brought into account in鈥痗alculating the company's adjusted trading loss for tax purposes鈥�(CTA09/S1044(7)).鈥�听

For pre-trading companies听where鈥痑n election is taken under CTA09/S1045, the company鈥痠s treated as having a trading loss equal to 186% of the qualifying Chapter 2 expenditure (CTA09/S1045(7))鈥�- there is no鈥�additional听deduction.听

For both trading and pre-trading claimants to SME relief, the amount of the loss, or鈥�deemed鈥痩oss, surrendered for a tax credit must be written off in the company鈥檚 tax computations.听

听Time limits听

听Claims鈥痗an be made, amended or withdrawn up to the last day of the period of鈥�either (贵础98/厂颁贬18/笔补谤补.鈥�83贰):听

  • two years beginning with the last day of the period of account, in a case where the period of account to which the claim relates is鈥�not longer鈥痶han 18 months.听

  • 42 months beginning with the first day of the period of account, in any other case.听

HMRC has discretion to accept late claims (贵础98/厂颁贬18/笔补谤补.鈥�83E(5)). This discretion is only exercised鈥�in accordance with听Statement of Practice 5 (2001).听

听Where a company has claimed SME relief,鈥痑nd鈥疕MRC鈥痑mends the return鈥�as a result of鈥痑n鈥痚nquiry to remove the claim because the SME relief conditions were not met, FA98/SCH18/Para.鈥�83E(3)鈥痑llows鈥痶he company鈥痶o make or amend鈥痑 claim鈥痶o鈥疪DEC鈥痠f鈥痠ts expenditure鈥�qualifies under that scheme.The time limit for making or amending this claim is:听

  • 30 days after the closure notice is鈥�issued;听

  • if there is an appeal, 30 days after the date on which the appeal is finally鈥�determined听

听Guidance on when a claim is鈥�渕ade鈥濃�痠s available in鈥�CIRD81805.听

CT600 / CT600L boxes听

听Guidance in filling out version 3 of the CT600 is available鈥�here.鈥疌T600L guidance is available鈥�here.听

听

Claim requirements for accounting periods which ended on or before 31 March 2006 or which began on or before 31 March 2023听听

Claims are made in the Company Tax return or鈥痓y amending the return鈥�(贵础98/厂颁贬18/笔补谤补.鈥�83叠). The return or amendment must include:听

  • accounts鈥�(original return only)听

  • computations鈥�(which must reflect the claims made).听听

  • a completed CT600 and听

  • if there is a claim for payable tax credit, a completed CT600L.鈥�听

听The requirement for a CT600L with a claim for payable tax credit was introduced from 6 April 2021. A revised CT600L is required each time a claim for payable tax credit is amended.听

听The requirement for computations and a CT600 with a claim made in an amendment to a return were introduced from 1 April 2019. Revised computations and CT600 are required each time claims are amended.They are required whether the amendment is delivered to HMRC through the Corporation Tax Online Service (also known as the COTAX gateway - details are in the COTAX Manual at鈥�COM130001) or by other means. 鈥�听

听Where any of the above documents are required but have not been provided the claim will be treated as not having been made.听

听Time limits听

Claims鈥痗an be made, amended or withdrawn up to the anniversary of the statutory filing date for the company tax return of the claimant company for the period for which the claim is made (贵础98/厂颁贬18/笔补谤补.鈥�83E(1)):听

听HMRC has discretion to accept late claims (贵础98/厂颁贬18/笔补谤补.鈥�83E(2)). This discretion is only exercised鈥�in accordance with听Statement of Practice 5 (2001).听

Additional information requirement听

All companies which claim SME R&D Relief or Research and Development Expenditure credit on or after 8 August 2023 () are required to听submit an Additional Information Form. Further information about this requirement, including how to send the dorm to HMRC can be found here.听听听

Where there is a late claim it should be dealt with in accordance with the guidance at Statement of Practice SP05/01. While this does not specifically refer to R&D payable tax credits, the approach is a general one that HMRC adopt. If, having considered the approach outlined there, the HMRC officer is considering refusing a late claim the officer should first make a referral to鈥疊usiness, Assets & International, CS&TD.听