Confusion Over Additional Information Form Requirements
As many will be aware, new rules regarding the submission of R&D tax relief claims came into effect on 8th August 2023. From this date, a new Additional Information Form (AIF) is required to be filed via HMRC’s online portal. The requirement to file an AIF is statutory and must be completed before the filing of the corporation tax return.
In September 2023, HMRC reported almost 50% of claims were filed without an AIF being completed. Despite HMRC’s efforts to publicise the new submission requirements, it was clear that many accountants were still unaware of the new requirement.
The system has now been live for almost four months, and we can probably assume that the 50% failure rate has fallen. The AIF requirement has been widely discussed amongst advisers, and companies which have filed claims without an AIF will have undoubtedly received their claim rejection notifications.
However, although we can assume that awareness of the requirement to file an AIF has improved, YesTax is aware that many accountants are not entirely familiar with what information needs to be provided.
YesTax was recently contacted by an accountant that wanted a review of a claim which was sat waiting to be submitted on the portal. The accountant also provided a full technical report which was to be reviewed alongside the portal submission data. However, on review of the portal submission, it was noted that only a fraction of the information contained in the report was being submitted as part of the AIF. When speaking to the accountant, it was clear that there was a misunderstanding of the level of detail required. It was assumed that one sentence answers could be given for the AIF and the report ‘would give the necessary detail to HMRC’.
Whilst there is no formal guidance on what level of detail to provide as part of the AIF submission, YesTax notes that the landing page for the portal is entitled ‘submit detailed information before you claim Research and Development (R&D) tax relief’. The questions which then follow suggest that HMRC are looking for the level of detail which would normally be found in a competently compiled technical report – that is, far more than simple one sentence answers. In addition, there is a 20,000-character limit for each answer given, suggesting that HMRC are happy to receive very detailed answers as part of the AIF submission.
Although YesTax is still compiling full technical reports (and ensuring they are submitted with the CT600), it is our view that the information contained in the AIF submission will be the primary source of information that HMRC will use when risk assessing R&D tax claims. It’s therefore imperative that the AIF submission provides as much detail as possible. Relying on the technical report as the primary source of information, in our opinion, carries substantial risk.
Our message is clear: use the AIF wisely. The submission should, wherever possible, contain as much information as any accompanying technical report.
YesTax. Positively Better.
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