Alan Woods | How to submit a claim for R&D tax relief
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Here at WhisperClaims, we get many questions about what to do with the eligible expenditure figures that are contained within our reports, and how best to submit claims for R&D tax relief. Now, we’re not accountants, and as such we’re neither qualified nor allowed to offer that kind of advice. Happily, though, we do know some really good accountants with lots of experience of this kind of tax!
To help support accountants making R&D tax claims, we asked Alan Woods of Woods Squared to outline his process and answer some of the more common questions we get asked. Take it away, Alan!
What’s your process for claiming R&D tax relief?
Preparation and submission of an R&D tax relief claim is a five-step process for us:
- Calculate the eligible expenditure and prepare a supporting report
We use WhisperClaims to help us prepare the supporting documents and calculate the eligible expenditure.
- Incorporate the R&D tax figures in the tax computations;
This can be done using the R&D feature in your tax filing software. We enter the value of the expenditure and then run a draft computation. If this results in a tax liability, we check and finalise the tax computations and move on to step three. If it creates a loss, we assess how best to utilise this, and then tell the software whether we want to claim a tax credit or carry the losses forward or backwards before moving on.
- Include the claim in the CT600;
Again, this is done semi-automatically by our tax filing software – we follow the steps in the software and then check that everything is correct. Whichever software you use, you’ll be able to find instructions on how to do this in the help and support section.
- Attach the supporting documents and submit the CT600;
Once we’re happy with the CT600, we attach any supporting documentation and send it off to HMRC.
- Wait for payment!
How should I submit the supporting documentation?
While there are several ways to submit the documents, including emailing them directly to HMRC, we simply attach them to the CT600 submission via our tax filing software. We aim to include R&D on original submission if at all possible, so with these we’ll attach the accounts and the supporting documents. Where we have to amend the CT600, we just attach the supporting documents to the amended submission – you don’t need to reattach the accounts at this stage.
The main advantage of this for us is that we get an electronic acknowledgement of submission from HMRC and can be sure that the documents won’t get lost or incorrectly assigned!
Do I need to chase HMRC about claims?
At the moment, HMRC are paying out claims fairly quickly – we’ve had a few recently that have been paid out within a week, and most are paid out within 20-28 days. The only claims we find we have to chase HMRC about are those where we’ve carried losses backwards – these tend to take a lot longer and often need a push.
Quick tip – we prefer chatting to HMRC through their webchat feature. You tend to get a quick response, and, more importantly, you can print off and save the transcript at the end for audit purposes.
Does HMRC pay interest on tax rebates created by R&D tax claims?
Yes! As with any situation where a company has overpaid tax, HMRC will pay interest at the official rate on any repayments of tax due after the submission of an R&D tax claim.
Can I do the submission without tax filing software?
Yes, but it’s a little more difficult. HMRC have provided a step-by-step guide on how to include R&D costs in a CT600, which guides you through the whole process. You can also use HMRC’s online tools.