Adapting to Change: A Guide to HMRC's Updated R&D Claim Procedures
As HMRC continue to streamline processes around R&D tax incentives, keeping up to date with change is essential – especially with the heightened focus on compliance and review.
A major change came into effect in August when HMRC introduced a mandatory Additional Information Form (AIF) that companies must submit in advance of filing their corporation tax return as part of their R&D claim.
However, HMRC's own statistics from September 2023 show that nearly 50% of the R&D claims in the initial month did not comply with the AIF requirement, rendering them invalid.
What is AIF?
AIF a web-based form accessible through a dedicated portal that, again, must be submitted prior to the corporation tax return.
The AIF is not just another piece of paperwork. It is the submission vehicle. The completion and submission of this online form is not optional. Failure to submit via AIF means HMRC has the authority to exclude the R&D claim from the company tax return, and they will. It’s another layer of complexity added to the claiming process but with the right agent support it can be easily navigated.
The technical report has always been fundamental to a successful R&D claim. It’s the document that articulates the specific nature of the R&D project, its technical uncertainties, and its adherence to qualifying criteria. Moreover, it presents a breakdown of costs. The AIF portal requires input of all the information that would have been gathered for the report.
What’s the Point of AIF?
Ultimately, the AIF digitises the submissions process and formalises information related to claims. It will likely serve as a critical tool for HMRC to assess the risk profile of R&D claims, reviewing aspects such as the sector involved, the quality of information provided, and the identification of the agents handling the claims.
As anyone with experience of this particular tax incentive will know, in the past year HMRC has ramped up its compliance capability and has intensified their focus on ensuring the BEIS guidelines are met.
A solid understanding of R&D legislation is as important as it’s ever been, to ensure technical compliance in what is being claimed. With AIF, though, a good agent will also assist you in the submission process and any future changes that come along.
Momentum Group - Specialist R&D Tax Credit Consultants, We Can Help
Here at the Momentum Group, we have employed tax consultants, chartered accountants, and technical report writers so we are well prepared and ready to tackle any claim. We visit your business, sit down one-to-one, and guide you through the R&D claim journey.
With legislation consistently changing and processes evolving, we are always up to speed on the latest developments so you can rest assured that nothing is missed in a partnership with the Momentum team.