Are you ready for next week's Additional Information gForm?
From 8 August 2023 all R&D claims must be submitted via HMRC’s online Additional Information gForm. Previously there has been no requirement for claimant companies to formally document the development activities. Whilst the legislation regarding qualifying activities has not changed, from 8 August 2023 when making an R&D claim the following questions will need to be answered:
1. What is the main field of science or technology?
2. What was the baseline level of science or technology that the company planned to advance?
3. What advance in that scientific or technological knowledge did the company aim to achieve?
4. The scientific or technological uncertainties that the company faced.
5. How did your project seek to overcome these uncertainties?
At YesTax we’ve been producing reports that address the above questions since our inception and always use the above criteria to qualify a company’s eligibility to make an R&D tax relief claim. The introduction of the above portal aims to tackle abuse of the reliefs. While the compulsory completion of the Additional Information is required from 8 August 2023, resulting in additional compliance work to be performed; this is a welcome introduction to ensure only genuine claimants and reputable advisors claim the relief going forward.
The Additional Information gForm must be submitted before the tax return has been submitted. Other information required includes the company’s UTR, PAYE reference, VAT number and SIC code. Details of any R&D agent used and contact details for the senior officer responsible for the claim will also need to be provided.
SIC Codes
An interesting requirement of the new Additional Information form concerns details of the claimant company’s SIC code – this has also been a noticeable question requested by HMRC throughout the R&D enquiries we have seen recently. A requirement of the scheme is that the project must relate to a company’s trade, either an existing one or one that it intends to start up based on the results of the R&D. Furthermore, HMRC has explicitly identified sectors that rarely qualify for R&D relief, these include care homes, childcare providers, personal trainers, wholesalers and retailers, pubs and restaurants. Advances in the arts, humanities and social sciences including economics do also not qualify for R&D relief. The requirement to provide the company’s SIC code will assist with the compliance checks and play an important role going forward.
As part of our due diligence, we are now reviewing all our client’s SIC codes to ensure it accurately reflects the development activities being undertaken by the company.
If you have any questions regarding the above information, please do not hesitate to contact us at hello@yes.tax for more information.
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