Whilst many of you will have seen this new service making the headlines in recent weeks, our experienced R&D tax specialists are breaking down its impact on the profession and its clients.
In December 2024, HMRC launched their R&D disclosure service, to enable companies to voluntarily disclose inaccuracies in past R&D claims.
Here’s our lowdown on how, when and why the service should be used by accountants and R&D tax advisers.
The service can be used by company directors or secretaries to make disclosures about the company’s tax affairs, or by tax advisers or accountants – their agents – to make disclosures on behalf of their clients.
The service can only be used if:
If these criteria are not met the R&D disclosure service cannot be used. However, that doesn’t mean that any inaccuracies or overpayments should be concealed.
Instead, we will explore other methods for making disclosure that do not enjoy the benefits of this new service.
Before using the service, you’ll need to gather information about the claim and the identified inaccuracy.
This would include preparing revised tax computations, breakdowns of the original and revised amounts claimed, and any workings showing how the amount due to HMRC has been calculated.
Once you have this, you can fill out the online form with details of the claim and reasons for the inaccuracy and upload your calculations.
HMRC will write to the company to either accept the disclosure and calculations or ask for more information. The company can then make payment to HMRC.
Absolutely! If you identify inaccuracies in any aspect of a company’s tax affairs, you should disclose this to HMRC.
It is understandable that some clients may not see the benefit in this service – especially as it will result in an additional tax bill – but as their agents you should encourage transparency to ensure matters are addressed.
Ultimately, this should provide peace of mind to you and your clients that the matter is properly resolved.
If the claim doesn’t meet the criteria for the R&D disclosure service, there are other ways to inform HMRC of inaccuracies.
The easiest way to do this is to amend the tax return, so if the company is still within the time limit, then you should simply submit an amended CT600.
If the inaccuracies were deliberate, you should inform HMRC using the Contractual Disclosure Facility instead.
If the claim is timed out and there is no Corporation Tax to pay or tax credit to pay back i.e. the company realised the benefit of their R&D claim through creating losses that were carried forward or back, then you can contact HMRC’s R&D tax team directly to disclose this.
The R&D Voluntary Disclosure Service is a valuable tool for companies and advisers to ensure compliance with HMRC regulations and maintain the integrity of R&D tax claims.
By proactively addressing inaccuracies, businesses can avoid potential penalties. If you’re unsure about whether the service applies to a specific claim, you should consult with a tax adviser or contact HMRC directly to explore your options.
While we hope this information is useful to accountants and advisers, it is important to ensure accurate claims are made in the first instance.
If you need help with preparing robust claims, based on the latest guidance and following best practice, WhisperClaims software and support line can help empower your practice to deliver R&D tax services with confidence.
To find out more about how we have supported more than 4,000 claims, book a demo today.
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