Make a claim for R&D tax relief on your company tax return
How to fill in your Company Tax Return to claim Corporation Tax relief on your Research and Development (R&D) project.
There may be other steps you must complete before you make a claim for R&D tax relief on your company tax return. Check the steps you need to take to correctly claim R&D tax relief.
Before you claim
If your tax relief claim covers a period of account that’s more than 12 months, submit a separate claim for each accounting period.
The deadline for a period of account, that’s:
-
18 months long or less is 24 months from the last day of the period of account
-
more than 18 months long is 42 months from the first day of the period of account
This is the deadline for making a claim for all accounting periods that fall within the period of account.
There are 4 different types of R&D tax relief, which one you use depends on when your accounting period began.
For accounting periods beginning before 1 April 2024 the schemes are:
- R&D Expenditure Credit (RDEC)
- small and medium-sized enterprise (SME) tax relief
For accounting periods beginning on or after 1 April 2024 the schemes are:
- the merged scheme
- enhanced R&D intensive support (ERIS)
If you’re claiming Research and Development Expenditure Credit (RDEC)
Find out if you qualify for RDEC.
Follow these steps to claim R&D expenditure credit on your Company Tax Return.
-
Show the expenditure credit as taxable income in your profit and loss account, or by adding it to your profit in your tax computations.
-
Put an ‘X’ in box 656 to tell us that you’ve submitted the claim notification form.
-
Put an ‘X’ in box 657 to tell us that you’ve submitted the additional information form.
-
Include bank details so that HMRC can make the payment.
-
Complete the supplementary form CT600L.
If you’re claiming small and medium-sized enterprise (SME) tax relief
Find out if you qualify for SME tax relief.
Follow these steps to claim R&D tax relief on your Company Tax Return.
-
Complete your tax computations and include the additional deduction in calculating your adjusted trading profit or loss — if you’ve given up losses for a payable tax credit, do not include this in your loss carry forward figure.
-
Put an ‘X’ in box 656 to tell us that you’ve submitted the claim notification form.
-
Put an ‘X’ in box 657 to tell us that you’ve submitted the additional information form.
-
If you are due a payable credit, include bank details so that HMRC can make the payment.
-
Complete the supplementary form CT600L, if you’re claiming a payable tax credit or R&D expenditure credit.
If you’re claiming under the merged scheme
To find out if you qualify for the merged scheme, check the merged scheme and ERIS guidance.
Follow these steps to claim under the merged scheme.
-
Show the expenditure credit as taxable income in your profit and loss account, or by adding it to your profit in your tax computations.
-
Put an ‘X’ in box 656 to tell us that you’ve submitted the claim notification form.
-
Put an ‘X’ in box 657 to tell us that you’ve submitted the additional information form.
-
Include bank details so that HMRC can make the payment.
-
Complete the supplementary form CT600L.
If you’re claiming enhanced R&D intensive support (ERIS)
To find out if you qualify for ERIS, check the merged scheme and ERIS guidance.
Follow these steps to claim R&D tax relief on your Company Tax Return.
-
Complete your tax computations and include the additional deduction in calculating your adjusted trading profit or loss — if you’ve given up losses for a payable tax credit, do not include this in your loss carry forward figure.
-
Put an ‘X’ in box 656 to tell us that you’ve submitted the claim notification form.
-
Put an ‘X’ in box 657 to tell us that you’ve submitted the additional information form.
-
Complete the supplementary form CT600L, if you’re claiming a payable tax credit.
How to use the R&D expenditure credit for the RDEC and ERIS schemes
You must follow these steps to use the expenditure credit before the final amount is paid to your company.
Step 1 — use the credit to pay your Corporation Tax for your current accounting period
Use the credit to pay your Corporation Tax liability for the accounting period.
If the credit means you’re due a repayment for Corporation Tax that has already been paid and you’re claiming using the:
- RDEC scheme, the interest will be calculated on a last in, first out basis
- ERIS scheme, the interest will be calculated from the day that the RDEC is used to pay the liability
If there is any expenditure credit left after paying your Corporation Tax liability, you need to compare your expenditure credit with the net amount claimed at step 2.
If there is no expenditure credit left, you do not need to do anything further.
Step 2 — compare your expenditure credit with the net amount claimed
Compare the amount of expenditure credit brought forward after you’ve paid your Corporation Tax for the current period with the net amount of expenditure credit you’ve claimed. The lower of the 2 figures is carried forward to either compare with the PAYE and National Insurance contributions or the PAYE cap at step 3.
If the expenditure credit brought forward exceeds the net amount, the excess may either be:
- given to another group company to meet a Corporation Tax liability
- carried forward to pay the company’s Corporation Tax liability in future periods
The net amount of expenditure credit is the figure you’ve claimed minus the notional tax on this amount at the applicable rate of Corporation Tax.
Find out the Corporation Tax rates and allowances.
Step 3 — compare the credit with PAYE and National Insurance contributions or the PAYE cap
If you’re claiming using the RDEC scheme, compare the expenditure credit you worked out at step 2 with your company’s total expenditure on PAYE and National Insurance contributions. The lower of the 2 figures is carried forward to pay your Corporation Tax for any previous accounting periods at step 4.
If the expenditure credit brought forward exceeds the total spent on PAYE and National Insurance contributions, the excess amount is carried forward to future periods.
If you’re claiming using the ERIS scheme, any amount exceeding the PAYE cap is carried forward to future periods unless the company is exempt from the cap.
Step 4 — use the credit to pay your Corporation Tax for any previous accounting periods
You must use the remaining amount to pay any outstanding Corporation Tax liabilities the company has for any other accounting periods.
Any remaining amount must be carried forward to be used for another group member at step 5.
Step 5 — use the credit for another group member
You can use the credit wholly or partly for any other group member’s Corporation Tax liability. It cannot be used for any other tax liability.
Any remaining amount must be carried forward to be used for other company liabilities under a contract settlement at step 6.
Step 6 — use the credit for other company liabilities under a contract settlement
You must use the expenditure credit to pay any other company liabilities to HMRC, like VAT or liabilities under a contract settlement.
Step 7 — the final amount is paid to your company
Any amount left at this stage can, as long as the ‘going concern’ conditions are met, be paid to your company. Further information is available at CIRD89820 Payment restrictions — going concern requirement.
Report a breach in standards about an R&D claim
If you’re a member of a recognised tax or accountancy professional body and want to report a breach in standards relating only to R&D, email HMRC at wmbciandrprofessionalbodies@hmrc.gov.uk.
We will not automatically respond, but we may contact you to ask for further information or clarification if we need to. We will not respond if this email inbox is used for any other purpose.