CT600L Form: Latest Supplementary Form for R&D Claims
If you are planning to make an R&D Claim then you should be aware of another addition of the CT600L form to HMRC’s R&D claim requisite. This blog will deliver all information you need to know about the CT600L form for the R&D Tax Relief claim and address all your queries.
What is the new CT600L form?
CT600L is a new supplementary form introduced by HMRC on 1st April 2021. This form consists of four pages, which ought to be filled by all the companies claiming R&D Tax Relief. Where corporation tax return (CT600 form) demands details of qualifying expenditure, the new CT600L form demands more comprehensive details.
This form applies to all the companies making R&D claims from 1st April 2021, whether small or medium-sized enterprises and claiming via SME scheme or large companies claiming via RDEC scheme, they all must submit this form along with corporation tax return (CT600) while making R&D Claim.
What Are The Changes In The New Form & Which Information Is Required for the CT600L Form?
Previously CT600 form required limited information for R&D Tax relief claims whereas this new CT600L form requires numerical details from the companies. Following are page-wise details of the CT600L form, so you can understand the required information.
CT600L Page 1:
The first page of the CT600L is confined to some administrative detail about the claimant’s project and company, which was also required on the main corporation tax return.
Page 2 & 3:
The next two pages are concerned with the companies claiming R&D Tax Relief via the RDEC scheme. It has seven steps break down for the calculation of R&D Tax Credits.
- Step I: The first step is the precise calculation of Research & Development Expenditure Credit (RDEC) set against CT liability.
- Step II: The second step inculcates the calculation of the estimated tax charge.
- Step III: The third step has your company’s expenditure on workers (PAYE) who are directly involved in the R&D project and estimated insurance contributions
- Step IV: RDEC will balance against outstanding Corporation Tax liabilities
- Step V: Under the fifth step of the calculation, you will provide the amount yielded to the group members.
- Step VI:
- Step VII: The last step has Payable Research & Development expenditure credit (RDEC)
After concluding these seven-step calculations and summarising any amount carried forward or dropped, there is the last page.
Page 4: The last page is for businesses making R&D Claim for R&D Tax relief or R&D Tax Credits and also summarizes the total amount of R&D Tax credits
Reason for This Additional Form
R&D Tax Relief is claimed by several innovative companies over years. As there was an increase in several fraudulent claims in past years and HMRC took various measures like CAP to limit such claims. Apparently, the reason for adding another requisite for the R&D Tax Relief claim is also to diminish these fraudulent claims. Providing some more details will also be proved beneficial for the companies, as it will reduce chances of inquiry by providing a sufficient amount of information for the claim and will require no further enquiry by HMRC. This additional paperwork will make the procedure faster for you.
Is This CT600L Form Compulsory for Everyone Making R&D Claim?
Yes, this form is mandatory for anyone making an R&D claim. Following is the list of claims which requires this form:
- Small or medium-sized enterprise (SME) is has undertaken work from subcontractors for a large company, for R&D project or has already received state aid or grants and now has to claim via RDEC them this form is mandatory for you.
- SME claiming for R&D Tax Credits from R&D Tax Relief
- A large company claiming via RDEC scheme
In the past few years, HMRC had to deal with fraudulent claims, and authentic claims were also checked and many claims became subject enquiry due to lack of information required. So Introduction of this new form CT600L will diminish such problems as it demands all the additional details required regarding R&D projects and calculations and will make R&D claims more feasible for people. It will ensure that only genuine companies access the claim who are contributing to research and development (R&D).
If you still find this new CT600L form complicated or if you feel like claiming R&D tax relief or R&D Tax Credit is very complex and daunting, feel free to contact our R&D Tax Credit specialists who can make it all simpler and easier for you.