Bracing for Change: Introducing the new Additional Information Form
Change is on the horizon for R&D tax relief submissions, and it's pivotal for all involved companies to be ready.
In a landmark announcement, the government unveiled a raft of alterations to the R&D tax relief initiative—a shake-up that represents the most significant transformation to the process since its inception in 2000. Central to these revisions is the introduction of the 'Additional Information Form' (AIF), a new online format set to supersede the R&D tax relief report.
The modifications will have profound implications on the submission process, and understanding them is crucial for businesses seeking to maximise their R&D tax relief benefits.
What is the Additional Information Form (AIF)?
The AIF is, basically, an online version of the R&D report and is accessible via the government gateway. The information requested is much the same as what we would prepare for our clients’ submission documentation. It includes the following:
- A full project-by-project description of the R&D undertaken
- A breakdown of qualifying costs project-by-project
- Details of the company’s accountant and/or R&D specialist involved
Who Does This Apply To?
Everyone seeking to claim R&D tax relief.
Each and every claim submitted on or after August 1, 2023, irrespective of the claim dates or accounting period, must be accompanied by an AIF. The AIF must be submitted prior to the company tax return. After August 1st, any R&D tax credit claim not accompanied by a completed AIF form will automatically be rejected by HMRC.
What Are the Key Changes?
The ultimate aim of the AIF is the formalisation of data. This will help HMRC organise and structure their analysis of claims submitted. There are several key points to note:
Costs will be entered on a "per project" basis, providing a crystal-clear picture of your expenditures.
The technical project write up will be entered on the same form, providing a coverage of cost along the following lines:
- For companies with 1 to 3 projects, you need to detail all the projects that encompass 100% of the qualifying expenditure.
- For companies managing 4 to 10 projects, you need to describe the projects that account for at least 50% of the total expenditure. A minimum of 3 projects must be outlined.
- For companies operating 11 to 100 (or more) projects, you need to describe the projects that represent at least 50% of the total expenditure. You're also required to describe a minimum of 3 projects. If the qualifying expenditure is scattered across multiple smaller projects, the top 10 largest must be detailed.
What Happens If I Don't Submit the AIF in Time?
HMRC will notify your company that they've removed the claim for R&D tax relief from the Company Tax Return.
What If I've Already Submitted My Tax Return?
If you need to submit the AIF after filing your tax return, you'll have to file an amended tax return. HMRC will consider this revised return as superseding the earlier one.
What Can I Expect?
With any new process, there may be initial hiccups that could result in processing delays. We strongly recommend submitting your claim before July 31, 2023, to avoid potential complications.
We’ll be on hand to work with our clients as the new process rolls out.
However, we're here to help navigate this significant change together so if you’ve any questions please contact us on 028 9140 4030, or email us at email@example.com