HM Revenue & Customs (HMRC) has revealed that almost half of all research and development (R&D) relief claims it has received from 8 August 2023 to 3 September 2023 have been submitted without the required Additional Information Form (AIF).
The AIF became mandatory at the start of August to help HMRC more easily identify fraud and error in claims and give them a better overall understanding of the types of claims being made. However, the form has created a new administrative step that businesses need to be aware of and allow ample time for.
The AIF requires firms to include the following before submitting their corporation tax return:
- Project details – the scientific or technological advances, uncertainties, baseline, and activities undertaken
- Project costs, including details of qualifying indirect activities
Ryan Director of Research and Development Nigel Holmes comments on the news from HMRC, “The latest change to the R&D tax relief application process was highly publicised, and so it is surprising to see that nearly half of the claims that have been processed so far by HMRC have been submitted incorrectly.
“Firms need to understand that regardless of when your accounting period is, all claims made after 8 August need to include the Additional Information Form.
“Completing the additional paperwork doesn’t need to be a burden. My advice to businesses is to maintain robust recordkeeping and make sure to start the process early.
“All expenditure should be captured on a project-by-project basis rather than an overall collective. By having this project information collected and readily available, firms will be able to complete the form more easily.”