HMRC introduced a new form called CT600L on 1st April 2021. It’s a four page form that must be completed and sent with your Corporation Tax Return when you make an R&D tax relief claim.

Does everyone making an R&D tax relief claim need to fill in a CT600L?

Yes, you need to complete a CT600L when you’re a large company using the Research and Development Expenditure Credit Scheme or an SME claiming Research and Development Tax Credits.

How is it different to the boxes already on the Corporation Tax Return?

You’ll be used to a few boxes about your R&D claims on your Corporation Tax return. As you’re probably already imagining (and dreading), four supplementary pages require considerably more details.

CT600L, page one, is simple admin information about the company – you’ve already got that there on the main corporation tax return. Copy and paste, job done.

Pages two and three are for companies using the Research and Development Expenditure Credit (RDEC) Scheme. You need to include all the figures that lead to your tax credit calculation. It’s broken down into seven steps:

  • “Step 1 – Calculation of Research & Development expenditure credit (RDEC) set against Corporation Tax liability
  • Step 2 – Calculation of notional tax charge
  • Step 3 – Expenditure on R&D workers’ PAYE and National Insurance Contributions
  • Step 4 – RDEC to be offset against outstanding Corporation Tax liabilities
  • Step 5 – Amount surrendered to group member
  • Step 6 – Amount used to discharge other company liabilities
  • Step 7 – Payable Research & Development expenditure credit (RDEC)”

It ends with your figures for any RDEC carried forward and surrendered.

Page four is for businesses using either tax relief scheme – RDEC and R&D Tax Credits. It’s a summary of your total R&D tax credit.

Do I have to fill in a CT600L?

Yes, it’s mandatory paperwork from HMRC.

Why have HMRC introduced another bit of paperwork?

We all know that there’s been significant defrauding of the R&D tax relief system. The tax relief is generous, and it’s been comparatively easy to make fraudulent claims. No one wants this, and this additional paperwork is designed to put people off even trying.

There’s a predicted bonus for you – speedier processing of your R&D tax relief claim. Often people who submit their R&D tax relief claim end up with processing delays because they haven’t included enough information. It’s hope that the CT600L removes this stumbling block by asking all the relevant questions at the right time. (This doesn’t take into account the huge additional pressures of COVID-19 and refers to a time when we’re back to normal.)

Jamie Smith