HMRC have highlighted a flaw with their software and the submission process when filing an R&D tax relief claim. The issue is affecting companies claiming both the Research & Development Expenditure Credit (RDEC) and the SME tax credit.

  •  As of 8 August 2023, whether as part of the SME scheme or the RDEC, all R&D claims submitted must be accompanied by an Additional Information Form.
  • As part of this new requirement, Box 657 on the CT600 must also be ticked to show that the form has been submitted. 
  • Where the claim is for the RDEC, Box 655 also needs to be ticked to show that it is a large company claim.
  • If the company making the claim is a SME, including as a SME contractor claiming the RDEC, Box 650 needs to be ticked.
  • The ticking of either of these boxes in conjunction with Box 657 is currently triggering, in some cases, the following errors:
    • Error 9283 — Box 655 can only be completed if at least one of the boxes 670 or 680 is greater than 0 (zero).
    • Error 9281 — Box 650 can only be completed if at least one of the boxes 670, 675 or 680 is greater than 0 (zero).
  • In order to get around the issue, HMRC are advising that ticks should not be made in both boxes.
  • HMRC guidance states that an update will be applied to fix the RDEC issue in April 2024 and the SME issue in April 2025.
  • As the Additional Information Form must be submitted to ensure the R&D claim is valid, it is advisable to make a note in the white space on the return that the form has been submitted even though the box has not been ticked.

Useful guides on this topic

Research & Development Tax Reliefs
What is R&D Relief? How does it work? Why does the size of the company matter? What is sub-contracted R&D? How do I write an R&D Report?

R&D: 'Large Company' Scheme (RDEC) Guide
What is the R&D Expenditure Credit (RDEC) Large Company Scheme for R&D relief? How does it work?

R&D: SME Tax Credit Scheme
What Research & Development (R&D) schemes are available for small and medium-sized companies undertaking R&D? How to make an R&D claim? What are the qualifying costs and how much can be claimed?

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