From 8 August 2023, a company submitting a Research and Development (R&D) claim must complete and submit an additional information form to HMRC to support their R&D tax relief or expenditure credit.
The additional information should be sent before you submit your company’s corporation tax return. If you do not do this, HMRC will write to you to confirm that it has removed the claim for R&D tax relief from the company’s tax return.
All claims must be made digitally with additional information provided to HMRC on a new digital form. To complete the additional information form, you will need the following details.
Company details
Your company’s:
- unique taxpayer reference (UTR), which must match the one shown in your company tax return
- employer PAYE reference number
- VAT registration number
- business type, for example your current SIC (Standard Industrial Classification) code.
Contact details
The contact details of:
- the main senior internal R&D contact in the company who is responsible for the R&D claim, for example a company director
- any agent involved in the R&D claim.
Accounting period start and end date
The accounting period start and end date for which you’re claiming the tax relief, which must match the one shown in your company tax return.
Qualifying expenditure details
Include details of the qualifying expenditure.
If you meet the conditions, you can claim for either or both:
- tax relief as a small and medium-sized enterprise (SME)
- expenditure credit as a large company or SME.
If you’re claiming for SME tax relief, you can claim for:
- cloud computing costs, including storage, for accounting periods beginning on or after 1 April 2023
- consumable items, for example materials, water, fuel and power
- data licence costs, for accounting periods beginning on or after 1 April 2023
- externally provided workers
- payments to participants of a clinical trial
- software
- staff
- subcontractor costs.
If you’re claiming for expenditure credit, you may be able to claim for:
- cloud computing costs, including storage, for accounting periods beginning on or after 1 April 2023
- consumable items, for example materials, water, fuel and power
- contributions to independent R&D costs
- data licence costs, for accounting periods beginning on or after 1 April 2023
- externally provided workers
- payments to participants of a clinical trial
- software
- staff
- some subcontractor costs.
Qualifying indirect activities
These are activities which form part of a project but do not directly contribute to the resolution of the scientific or technological uncertainty.
Only include the qualifying expenditure detailed in the section ‘Qualifying expenditure details’, if it was incurred on the following qualifying indirect activities:
- scientific and technical information services, insofar as they are conducted for the purpose of R&D support, such as the preparation of the original report of R&D findings
- indirect supporting activities such as maintenance, security, administration and clerical activities, finance and personnel activities, insofar as undertaken for R&D
- ancillary activities essential to the undertaking of R&D, for example, taking on and paying staff, leasing laboratories and maintaining R&D equipment including computers used for R&D purposes
- training required to directly support an R&D project
- research by students and researchers carried out at universities
- research (including related data collection) to devise new scientific or technological testing, a survey or sampling methods, where this research is not R&D in its own right
- feasibility studies to inform the strategic direction of a specific R&D activity.
Project details
The number of all the projects that you’re claiming for in the accounting period and their details.
If you’re claiming:
- for one to three projects, you need to describe all the projects you’re claiming for that cover 100% of the qualifying expenditure
- for four to ten projects, you need to describe those projects that account for at least 50% of the total expenditure, with a minimum of three projects described
- for 11 to 100 (or more) projects, you need to describe those projects that account for at least 50% of the total expenditure, with a minimum of three projects described — if the qualifying expenditure is split across multiple smaller projects, describe the ten with the most qualifying expenditure.
Additional information
In addition, to further support the R&D projects in a separate R&D report, you can include for example:
- the claim methodology
- use of sampling
- details of the competent professionals.
You can submit the separate R&D report either:
- by email, using one of the 'contact us' email addresses – copying in your customer compliance manager
- online, when you complete your company tax return.
Description for each of the projects
Each project should address the following:
a. What is the main field of science or technology?
Provide a brief description of the field of science or technology that the project relates to.
b. What was the baseline level of science or technology that the company planned to advance?
Describe the level of knowledge or capability that existed at the time the project started and which the company intended to advance, for example if the intention was to:
- improve an existing material or device: what were its existing features and capabilities?
- develop new knowledge in a particular area of science or technology: what was already known?
c. What advance in that scientific or technological knowledge did the company aim to achieve?
Provide a description of the advance using the baseline level of science or technology in the previous answer as a comparison.
An advance in knowledge or capability in science or technology may have physical consequences or may be an increase in overall knowledge, but in either case, a competent professional working in that field would recognise it as an appreciable improvement.
The improvements may include:
- creating a process, material, device, product or service that increases overall knowledge or capability in a field of science or technology
- appreciably improving an existing process, material, device, product or service, for example to save costs or reduce waste (this refers to genuine non-trivial improvements which result in more than a minor or routine upgrade)
- using science or technology to copy the effect of a current process, material, device, product or service in a new or improved way.
d. What scientific or technological uncertainties did the company face?
You must include only scientific or technological uncertainties, for example, the company:
- does not know if it is possible to create or improve the product or process
- cannot readily deduce how to create or improve the product or process, for example you tried to build a medical diagnostic tool combining non-invasive testing technology, artificial intelligence (AI) and portability, but you’re not sure about the method to do this
Your description of the uncertainties should explain:
- what is stopping you from achieving the advance in scientific or technological knowledge (a problem is not an uncertainty if it can be resolved in a discussion with peers)
- why it is a technological or scientific uncertainty for the industry, not just your company
- if a competent professional working in the field would be uncertain as to how to achieve the advance, and explain why.
e. How did your project seek to overcome these uncertainties?
Provide more details about the direct R&D activities that try to resolve the scientific or technological uncertainties, as well as qualifying indirect activities.
Describe the information in sufficient detail to tell HMRC:
- how the R&D project was not straightforward
- the methods planned or used to overcome the uncertainty
- if the uncertainties were resolved, if yes how, and if not, why not.
Activities that directly contribute to R&D may include:
- creating or adapting software, materials or equipment needed to resolve the uncertainty
- planning activities such as a detailed plan of how you will carry out the project
- designing, testing and analysis to resolve the scientific or technological uncertainty.
Include the qualifying expenditure for each project for indirect activities that do not directly lead to resolving the uncertainty; a list of what may be included can be found in the section qualifying indirect activities.
Quantify the R&D amount
The claim should include the amount of the qualifying expenditure that applies to each specific project and the type of relief, for example R&D tax relief, expenditure credit or both.
Submit the form
You can submit the form if you’re:
- a representative of the company – you will need the Government Gateway user ID and password you used when you registered for Corporation Tax; if you do not have a user ID, you can create one the first time you sign in.
- an agent – you will need the Government Gateway user ID and password you used when you registered for the agent services account; if you do not have a user ID, you can create one the first time you sign in.
