R&D tax relief administration, interaction with other reliefs and anti-avoidance

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

R&D tax relief administration, interaction with other reliefs and anti-avoidance
Claims for R&D tax relief
Advanced R&D assurance for small companies
R&D anti-avoidance
R&D: interaction with quarterly payments
R&D: interaction with the patent box regime
R&D: interaction with creative sector tax reliefs

The following paragraphs set out details of the administration of R&D claims, the interaction with other tax provisions and anti-avoidance rules. For further details of SME R&D tax relief, see the Research and development SME tax reliefs guidance note and for details of research and development expenditure credit (RDEC) see the Research and development expenditure credit (RDEC) guidance note.

Claims for R&D tax relief

Claims for R&D tax relief must be made by including the claim in the company’s tax return either in the original submitted return or through an amended return. The time limit for submission of the claim is two years from the end of the relevant accounting period.

FA 1998, Sch 18, paras 83B–83E

If the company is large, then the Large Business Directorate dealing with the company’s tax affairs will examine the R&D claim; otherwise, the claim will be examined by HMRC’s specialists R&D units. Smaller companies can also use the Advanced Assurance process which is detailed below.

CIRD80350–CIRD80500

Advanced R&D assurance for small companies

There is a limited advance assurance process which, broadly speaking, enables small companies to contact HMRC in advance of submitting a claim for R&D for confirmation that the activities they carry out will qualify for R&D tax relief.

The main advantage of advance assurance for small companies is that successful applicants’ claims for R&D tax relief will be allowed without further enquiry for the first three accounting periods. Applicants also have the benefit of HMRC specialists being available to assist with queries about the relief, which could be useful if the company has not engaged their own specialist advisers. The scheme is voluntary but companies and their advisers should consider the benefits, as a successful claim gives a greater level of certainty. It could improve the company’s ability to obtain initial funding or secure additional