Ian Davie
Senior Consultant
HMRC has released a significantly updated version of its guidance on SME R&D tax relief claims (CIRD81800), laying out a much stricter process for submitting, amending, and validating claims. The revised rules apply to accounting periods starting on or after 1 April 2023, and to any claims submitted from 8 August 2023 onwards. The changes reflect HMRC’s ongoing push to crack down on invalid or speculative claims and to bring its processes in line with recent reforms to the UK’s R&D tax relief system.
One of the key takeaways from CIRD81800 is that R&D tax relief is confirmed to be a claim-based incentive. It doesn’t apply automatically. Companies now need to meet a number of new requirements before a claim will be accepted. These include submitting an Additional Information Form (AIF) online and, in many cases, giving HMRC advance notice that they intend to make a claim. If either step is missed, the claim will be invalid, even if it’s included in a company’s tax return. While the previous version of the guidance mentioned these requirements, it didn’t make the consequences of non-compliance this clear.
The guidance also sharpens up the rules on how claims must be submitted. All claims, whether they are original or amended, have to go through HMRC’s Corporation Tax Online Service (COTAX). They must include a completed CT600 form, updated tax computations, and, where relevant, a CT600L form for payable tax credit claims. If the claim doesn’t clearly state the amount of relief or credit being claimed, it won’t be valid. Even if a company has already submitted an AIF under the SME scheme, it will need to submit a new AIF if it later wants to amend the claim and switch to the RDEC scheme.
There is also emphasis around how losses are treated. The updated guidance makes clear that any R&D relief claimed must be reflected in the company’s adjusted trading loss for tax purposes. For pre-trading companies, they are treated as having a loss equal to 186 percent of the qualifying expenditure – but there’s no additional deduction allowed. If that loss, or deemed loss, is being surrendered in return for a payable credit, the company must also write off that amount in its tax computations.
The rules on deadlines have been updated as well. If the accounting period is 18 months or less, companies now have two years from the end of that period to submit, amend, or withdraw a claim. If the period is longer than 18 months, they have 42 months from the start of the period. This is a shift away from the previous approach, which used a simpler rule based on the filing date. HMRC still has discretion to accept late claims, but only in line with its existing policy under Statement of Practice 5 (2001).
Another key addition is a fallback option for companies whose SME relief claim is rejected during an HMRC enquiry. If that happens, the company can switch its claim to the RDEC scheme, as long as the spending qualifies. They have 30 days from the date of the closure notice, or the end of any appeal process, to make that new claim.
The revised guidance goes further than the old version in linking back to legislation and HMRC manuals. It includes references to the correct ways to complete the CT600 and CT600L forms, as well as direct links to the AIF and pre-notification pages. It’s much more detailed and process-driven than the earlier guidance, which focused more on general timelines and rules, with limited mention of the new digital procedures.
All in all, this update marks a big step in HMRC’s shift towards a more tightly controlled, compliance-heavy approach to R&D tax relief. It raises the admin burden for businesses, especially smaller ones, but is clearly designed to cut down on errors, fraud, and misinterpretation in an area that has become increasingly complex. Companies planning to make a claim now need to follow the rules to the letter, from submitting the right forms to meeting strict deadlines. Otherwise, they risk having their claim rejected entirely.
For the full CIRD81800 guidance, visit: CIRD81800 – R&D tax relief: conditions to be satisfied: SME scheme claims and time limits – HMRC internal manual – GOV.UK
Need help navigating HMRC’s updated processes or have questions about your R&D tax claim? Contact the TBAT team today for expert support.
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