As of April 1st, 2021, all companies submitting R&D tax credit claims be it Small and Medium Size companies (SME) whether it is for a reduction of tax liability, payable credit request and/or for Research and Development Expenditure Credit (RDEC) will now be required to complete a supplementary page, the CT600L, when submitting their corporation tax self-assessment and/or when making any amendments to that self-assessment.
WHY IS THIS NEW FORM NECESSARY?
Certain errors were occurring in processing R&D tax credit claims. One example of this were submissions of RDEC claims. More specifically, certain companies had incorrectly used RDEC at Step 1 to discharge liabilities which were due from a company as if they were an amount of corporation tax chargeable on the company.
There are positives in this new form as it is likely that R&D claim submissions will have a faster processing time, and also reduce errors in processing. All claimants filing R&D tax credit claims should be aware of this upcoming change.
WHAT HAPPENS IF YOU DO NOT FILE THE FORM?
It is likely the form, once enacted, will be mandatory in order to process an R&D tax credit claim.In 2019, HMRC made it a requirement to include supporting evidence with submitted R&D claims. This new form is another step in the process and if the form is not submitted or filed with the R&D claim, it is more likely than not that HMRC will not process the R&D tax credit claim.
We indicated a few years ago (R&D Tax Credit Scheme: A Victim of Its Own Success) that we are seeing history repeat itself but in the UK. In other countries that we provide our services, which are mature in comparison, these types of submission forms are the standard norm. As more companies become aware of the programme and R&D claim submissions continue to increase annually year over year, we already know the type of additional changes that are likely to happen in the programme.
The primary reasons this form and other additional changes will take place involve those claimants that are now submitting claims that have nominal or no eligibility attempting to obtain thousands in benefits or claims submitted that are fraudulent (Fraudulent R&D Claim Submission and Claimants Jailed, Eyeopener for All Claimants). At this time, we already know that HMRC have identified three hundred million pounds in fraudulent claims.
We have already advised our clients and alliances of these changes. Do you want to be advised by a firm who reacts to new changes or a firm, like RDP Associates, who is actively preparing for these types of changes before they take place?
If you are claiming R&D Tax Credits and believe your service provider is only being reactive to these ongoing changes, feel free to contact us so that we can provide you with a fresh, new perspective.