R&D Tax Credits Changes

August 8th will see some of the biggest changes in the process of claiming R&D tax credits since the scheme began in 2000.

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Major changes to the R&D tax credit scheme

From the 8th August, all R&D claims, irrespective of which tax year they are for, must meet new requirements, HMRC will reject all incomplete submissions.

There will be key changes surrounding:

  • Project reporting
  • Reporting requirements for qualifying expenditure
  • The company and contact details

In the UK, Visiativ has been managing R&D tax credit claims for over 15 years. (You might remember us as Jumpstart and latterly, ABGI). We can support you through these changes – with advice and guidance or by managing part or all of the process.

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Upcoming changes to project reporting for R&D tax credits

Businesses with 1-3 projects all projects must be described. For those with 4 to 10 projects, at least 3 projects must be described, accounting for at least 50% of total expenditure. For those with 11 or more projects, up to 10 projects accounting for at least 50% of total expenditure should be described.

There are six prescribed detailed technical questions covering each project to submit an R&D claim:

  • What is the main field of science or technology
  • What was the baseline level of science or technology that the company planned to achieve
  •  What advance in that scientific or technological knowledge did the company aim to achieve
  • The scientific or technological uncertainties that the company faced
  • How did your project seek to overcome these uncertainties
  • Which tax relief you’re claiming for and the amount

What does this mean for you?

This increased level of complex reporting may challenge accountants lacking R&D expertise or technical knowledge. You may face difficulties accurately capturing and presenting the required information, potentially leading to incomplete or incorrect submissions.

The shift to new online HMRC portal requires accountants to quickly adapt to the technological aspect, with only a 30-day completion timeframe once the submission is initiated.

Reporting requirements for ‘Qualifying Expenditure’

The reporting requirements for ‘Qualifying expenditure’ must be broken down by project and the amount of qualifying indirect activity must be noted. Details of qualifying expenditure:
  • Cloud computing costs, including storage, for accounting periods beginning on or after 1 April 2023
  • 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

Remember – HMRC will reject incomplete submissions. And, of course, these are not the only changes.

What does this mean for you?

Reporting has become far more complex. Breaking down expenditure by project and categorising it accurately will be challenging for those accountants unfamiliar with R&D projects. You might need to rely more on the client but this can bring its own risks. Are you confident they will do it accurately, is their record – keeping adequate. Will they push back and expect you to do it? This is likely to take more time to do – more cost for you and/or your client.

New requirements for company and contact details

The new requirements for company and contact details applies to ANY R&D claims filed from 8th August this year.

Company Details: 

  • Unique Taxpayer Reference (UTR) must match the one in the Company Tax Return
  • Employer PAYE reference number
  • VAT registration number
  • Business type, for example the current SIC (Standard Industrial Classification) code
  • Software
  • Staff
  • Subcontractor costs

Contact Details:

  • 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
  • The accounting period start and end date must be entered.

What does this mean for you?

Although these details are not that complicated, they are potentially significant. Is it clear who the client’s Senior R&D contact will be? Are they aware of the content of the claim? They may demand a detailed briefing before agreeing to be HMRC’s company contact. Assuming you have provided support with the claim to the client , you would be the agent – and that brings PCRT requirements in to play.


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