28 October 2023
As part of a wider package of measures seeking to tackle error, fraud and other poor behaviours by companies making R&D tax relief claims and their advisers, two additional disclosure requirements have recently been introduced. Companies will need to add two more ‘TLAs’ (three letter acronyms) to their tax vernacular to ensure continued successful claims can be made – the ‘ANF’ (advanced notification form) and the ‘AIF’ (additional information form).
Claimant companies that fail to comply with these new requirements will have their R&D claims removed from their corporation tax return.
Advanced notification form (ANF)
Companies making an R&D tax relief claim for the first time, or that have not made a claim in the previous three years, will need to submit an ANF within six months of the end of the accounting period. This requirement takes effect for periods beginning on or after 1 April 2023. The form is filed online and can be submitted by the company, its corporation tax compliance agent, or its specialist R&D tax adviser.
Where such form is not filed by the deadline, an R&D claim cannot be made (and should a company attempt to do so, HMRC will amend its tax return to remove the claim).
The form requires summary details relating to the intended R&D claim, to include a high-level summary of the R&D activities.
Whilst the intention of the form is arguably well-founded (being to prevent last minute claims, which are often prompted by pressure-selling tactics from certain less scrupulous advisers), the timing of the deadline, arriving prior to many other filing deadlines for the same accounting period, is likely to catch many businesses unaware, and could result in genuine claimants being unable to submit an R&D claim.
Additional information form (AIF)
Companies submitting R&D claims to HMRC after 8 August 2023 also need to have first submitted a digital AIF, which requires (amongst other information):
- specific details in relation to the activities undertaken and expenditure incurred;
- the identity of any agent that has advised in relation to the making of the claim; and
- the identity of the individual in the company responsible for making the claim.
The format of the disclosure of financial and technical information will also be a noticeable change for many claimants, with an emphasis on providing this on a ‘per project’ basis. For claims involving larger numbers of projects, this will add time and complexity to the submission preparation.
Like the ANF, the AIF must be submitted online by the company, its corporation tax compliance agent, or its specialist R&D tax adviser. In most cases, we anticipate the R&D adviser will submit the AIF as part of the process of preparing the claim. Once submitted, box 657 on the company’s form CT600 (company tax return) should be ticked, confirming that this requirement has been met.
Both the ANF and the AIF represent new requirements for claimant companies, the existence of which many businesses may not yet be aware of. This is certainly the case based on anecdotal feedback we have received suggesting that almost 50% of claims made in the six weeks following 8 August 2023 failed to include an AIF.
It will be incumbent on advisers (and indeed HMRC) to continue to raise awareness to ensure that genuine claims for R&D tax relief are not disqualified through failure to comply with these new procedures.
For more information, or advice in complying with these new requirements, please get in touch with James Tetley or your usual RSM contact.