Almost half of R&D claims lack compulsory form
An attempt to reduce inheritance tax through a home loan scheme faced a major setback at the first-tier tribunal.
Since August 8, 2023, all claims for research and development (R&D) tax relief must be accompanied by an additional information form (AIF). Shockingly, nearly half of all claims made until September 3, 2023, failed to include this crucial AIF.
Understanding the AIF
The AIF was introduced during the Autumn Statement in 2021 to enhance compliance in the R&D tax regime. It must be submitted before the corporation tax return to validate any R&D relief claim.
Consequences of Not Submitting the AIF
Failure to submit an AIF before filing the corporation tax return results in HMRC rejecting the R&D claim as invalid.
Why Such Low Compliance?
The unexpectedly high number of claims submitted without an AIF has puzzled many.
As with any new requirement, lack of awareness likely plays a role. However, a significant surge in R&D claims on August 7 suggests that many were aware and filed early to avoid the requirement.
In some cases, work on an R&D claim may have been completed well before August 8, with an assumption that the corporation tax return would follow shortly. If unexpected delays occurred, failure to submit an AIF may have been a simple oversight.
In Conclusion
To avoid the hassle of amending claims and the risk of losing them due to the closing amendment window, it's crucial to submit an AIF before making any R&D relief claim.
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