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HMRC changes to Corporation Tax Self-Assessments

From the 1st April 2019 new requirements will come into force from HMRC which will affect the way in which Companies and Agents can make amendments to a Corporation Tax Self-Assessments (CTSA) to include claims for Research and Development tax relief.

These changes also apply to amendments made to include claims for any of the various Creative Industry tax reliefs.

It is worth noting however that they do not include claims for Research and Development Capital Allowances (RDAs).

So, what is the change?

From 1st April 2019 all claims for R&D tax relief or RDEC that are made via an amendment to a CTSA, which are not made through the HMRC gateway, must be supported by a CT600, revised tax computations and, if they have not already been provided, the accounts.

If the amendment is not received by HMRC with the required supporting information it will not be treated as an amendment and HMRC will contact the agent and or the company stating this.

There will be a transitional period from 1st April 2019 to 30th June 2019. During this, time if the company’s amendment is returned as not being in the required form for an amendment the company will be given a minimum period in which to resubmit the amendment in the required form. This will be the case even if this minimum period extends past the statutory filing deadline.

Why the change?

Since these tax reliefs we introduced a number of years ago, HMRC have accepted claims to amend a CTSA to include one of the aforementioned reliefs in writing by letter or email.

However, this has led to several problems which have impacted companies, their agents and even HMRC themselves.

Some of the more common problems experienced have been;

  • Delays in processing an amendment due to incomplete information.
  • HMRC receiving inadequate details of claims on the deadline for making a claim, meaning that the company loses its ability to make a claim.
  • Poor communication between a company’s regular accountant and its specialist agent, leading to the company subsequently submitting incorrect CTSAs.
  • An agent which has not been given authority by a company to amend its CTSA attempting to amend that company’s CTSA.

Who will be affected?

The good news is that for agents who submit amendments to CTSAs electronically through the HMRC gateway there will be no impact of these changes.

As specialist agents in dealing with claims for Research and Development tax relief, MPA welcome these changes as a way of reducing errors in CTSAs and bridging the communication gap between different sets of advisors.