RDEC Submission Checklist for HMRC

The Research and Development Expenditure Credit (RDEC) is a UK tax relief scheme offering a 20% credit on qualifying R&D costs. After accounting for the 25% Corporation Tax, this provides a net benefit of around 15%. Here's what you need to know to successfully claim:

Key Points:

• Eligibility: Available to all UK limited companies conducting R&D to advance scientific or technical knowledge.
• Deadlines:
  • Notify HMRC of your intent to claim within the accounting period or within six months of its end (for first-time or infrequent claimants).
  • Final claims must be submitted within two years of the accounting period's end.
• Mandatory Forms:
  • Claim Notification Form (for first-time/infrequent claimants).
  • Additional Information Form (AIF) (required since 8 August 2023).
• Qualifying Costs: Staff salaries, subcontractor fees, consumables, and software directly tied to R&D activities.
• Documentation: Detailed project descriptions, payroll records, invoices, and financial statements are essential to support your claim.

Steps to Submit:

1. Prepare: Verify eligibility, gather company details (UTR, PAYE reference, VAT number), and ensure compliance with deadlines.
2. Categorise R&D Projects: Identify projects, describe advancements, and document costs.
3. Submit Forms: Complete the Claim Notification Form (if needed) and the AIF before filing your Company Tax Return.
4. Calculate RDEC Credit: Apply the 20% rate to qualifying costs and adjust for Corporation Tax.
5. File with HMRC: Include the claim in your CT600 and keep records for six years in case of enquiries.

Tip: Missing deadlines or providing inaccurate information can lead to rejected claims or HMRC scrutiny. Accurate preparation and compliance are key to securing your RDEC credit.

6. How to file compliant research and development tax relief claims

Preparing Before Submission

Getting everything in order before filling out forms is key to meeting HMRC's requirements. This groundwork ensures your notification and Additional Information Forms are completed accurately.

Check Eligibility and Deadlines

The RDEC scheme is available to all limited companies that have carried out qualifying R&D work. It doesn’t matter what size your business is or whether you’ve received grant funding or state aid. Your work qualifies as R&D if it has advanced technical or scientific knowledge in your field.

Keep an eye on the deadlines. For accounting periods starting on or after 1 April 2023, you must notify HMRC about your intention to claim either during the accounting period or within six months of its end. This rule applies to first-time or infrequent claimants. However, if you’ve consistently filed claims within the last three years, you may not need to notify.

The final deadline to submit or amend your full claim is two years after the accounting period ends. If you miss the six-month notification window and you're a first-time or infrequent claimant, you won’t be able to claim for that period.

Starting 1 April 2024, companies can claim R&D tax relief even if their projects have been subsidised by grants or state aid. This change broadens the scope for businesses that were previously excluded.

Next, gather all the company and financial information needed to support your claim.

Collect Company and Financial Details

Make sure the information in your claim matches your Company Tax Return. You’ll need to have these details ready:

• Unique Taxpayer Reference (UTR)
• PAYE reference
• VAT registration number
• Standard Industrial Classification (SIC) code

These details help HMRC verify your identity and process your claim efficiently.

You’ll also need to identify any connected companies that were linked to your business for at least one day during the accounting period. This includes subsidiaries, parent companies, or businesses under common ownership, as they can affect your eligibility and how HMRC calculates your claim.

Gather supporting documents like annual accounts, corporation tax computations, and payroll records. These will back up the expenditure figures in your claim and show that your R&D costs are legitimate business expenses.

If relevant, calculate the total de minimis state aid your company received in the past three years. You’ll need to declare any additional benefits claimed for sectors like agriculture, aquaculture, or fisheries in the current period and confirm that your claim won’t exceed the de minimis limit.

Once your company details are sorted, it’s time to review and categorise your R&D projects.

Identify and Categorise R&D Projects

To start, figure out which of your projects qualify as R&D. Any work where your company has advanced technical or scientific knowledge likely qualifies. However, fitting niche or specialised work into HMRC’s predefined categories can sometimes be tricky.

"As a specialist engineering company, our work is quite niche and doesn't always fit the predefined categories or descriptions that HMRC use. By developing an understanding of our business and working closely with our Project Manager, Zest Research & Development/Barrie was able to submit a compliant and successful R&D tax relief submission. A fantastic result, which, before their advice and helpful support, we would not have understood or qualified for. R&D monitoring now forms part of our routine management systems – Thank you Barrie!"
– Joanna Edwards, Director, Edwards Diving Services Limited

The number of projects you’re claiming for determines how you categorise them. If you’re claiming for one to three projects, describe each project individually. For four or more projects, focus on the ones that represent at least half of your qualifying expenditure, following HMRC’s guidelines.

For each project, document the advancements, technical challenges, and systematic methods involved. This structured approach ensures you capture all eligible work and present your claim clearly.

Gather Supporting Documents

Proper documentation is crucial to proving your claim’s validity and addressing any compliance checks from HMRC. Keep detailed records of all qualifying expenditure, including staff costs, subcontractor fees, and consumables like water, fuel, and power.

Prepare technical and costing reports at the end of the accounting period to back up your claim. These reports should cover the challenges your projects tackled, the methods used, and how they contributed to advancing knowledge in your field.

HMRC offers an R&D qualification tool to help verify your project’s eligibility before submission. Use this tool and save the results for compliance purposes. If HMRC questions your claim later, having this documentation on hand shows you took reasonable steps to ensure eligibility.

If your company received state aid, keep detailed records of the amounts, dates, and purposes of each payment. This information supports your declaration that the de minimis limit hasn’t been exceeded.

Additionally, if your company is involved in trading goods or relevant electricity activities, you’ll need to declare this in your claim. Gather any related documentation, as HMRC may request evidence during their review.

Incorporating R&D monitoring into your regular management systems can make identifying and categorising qualifying projects much easier. This proactive approach ensures you capture all eligible work as it happens, avoiding the hassle of reconstructing activities months later.

Filling Out the Claim Notification Form

Once you've gathered your documentation and project details, the next step is to complete the claim notification form. This form notifies HMRC of your intention to file an R&D claim and extends the deadline for your full submission.

Check Notification Requirements

The claim notification form is required for companies submitting an R&D claim for the first time or those that haven’t filed a claim in the past three years. This rule applies to accounting periods starting on or after 1 April 2023.

If your company has regularly submitted R&D claims within the standard deadlines over the last three years, this requirement likely doesn’t apply to you. Make sure you understand the specific notification deadlines based on your claim history and accounting period.

The notification must be submitted either during the accounting period or within six months after it ends. For instance, if your company’s financial year ends on 31 March 2024, the notification deadline would be 30 September 2024. Missing this deadline means you’ll need to submit your full claim within six months of the accounting period’s end, or you’ll lose the right to claim.

Submitting the notification form provides extra time for your full R&D claim submission, extending the deadline to two years after the end of the accounting period.

Complete and Submit the Notification

To complete the form, you’ll need to provide your company’s UTR, PAYE reference, and VAT number. If your company is based in Northern Ireland, you’ll also need to include additional registration details.

The form requires the contact details of your main senior internal R&D contact, such as a company director, along with information about any agents involved in the claim. Having these details ready will help speed up the process.

You’ll also need to enter the accounting period start and end dates as listed on your Company Tax Return. For periods longer than 12 months, split the timeframe into separate 12-month periods (and any shorter periods) and submit a notification form for each.

The notification form includes a section for a high-level summary of your planned R&D activities. This summary should explain how your projects align with HMRC’s definition of R&D. For example, if you’ve developed software, describe its intended purpose. Supporting evidence isn’t required at this stage; detailed descriptions and financial data will be included later in the Additional Information Form.

If your company is working on multiple R&D projects, provide an overview of all activities planned for the accounting period. A more detailed breakdown of each project will be submitted with the Additional Information Form.

Make sure to submit the notification form before the six-month deadline. This allows HMRC to process it and gives you time to prepare the Additional Information Form. Keep in mind that the notification form is separate from the Additional Information Form (AIF), which must be submitted before your Company Tax Return.

"The Claim Notification Form needs to be submitted if you haven't made an R&D claim within the last 3 years. It tells HMRC that you intend to submit a claim, and gives you until 2 years after the end of the accounting period to make the submission. Without submitting it, you will need to make your R&D Tax Claim submission within 6 months of the end of the accounting period."

Once the notification form is completed and submitted, you can focus on detailing your projects and costs in the Additional Information Form.

Filling Out the Additional Information Form (AIF)

After submitting your notification form, the Additional Information Form (AIF) is the next step in providing HMRC with a detailed breakdown of your R&D activities. This digital form must be submitted before including your R&D Tax Relief claim in your Company Tax Return. It captures key details about your company, projects, and expenses, helping HMRC assess your claim. Completing this form accurately is crucial for a smooth submission process.

Complete Company and Business Activity Sections

The company information you provide on the AIF must match the details in your Company Tax Return. Include your UTR, PAYE reference, and VAT number (if applicable). For businesses registered in Northern Ireland, specific registration details must also be added. Don’t forget to include your standard industrial classification (SIC) code, which identifies your business sector. Providing precise details helps avoid delays during processing.

If your company was connected to other businesses during the accounting period, you need to declare this, as it can affect how costs are treated. For example, if a larger company owns 25–50% of your business’s voting or share capital, your business will be classified as a "partner enterprise". In such cases, a proportion of the partner enterprise’s workforce, balance sheet, and gross assets must be included when calculating your company size.

You’ll also need to confirm whether your company engaged in trading goods during the accounting period. If your activities involve electricity - such as generation, transmission, or distribution - you must declare this as well. For companies without such trade, opting out under section 1112J(4) of the Corporation Tax Act 2009 also requires a declaration.

If your business or any group companies received de minimis state aid in the past three years, you must calculate and declare the total aid received. Specify the additional benefit claimed in the current period for each sector (e.g., agriculture, aquaculture, or other). Confirm that your current claim won’t exceed the de minimis limit.

Before starting the AIF, use the HMRC R&D Qualification Tool to check if your activities meet HMRC’s R&D criteria. Keep a record of the results to include with your submission.

Once your company and business details are confirmed, move on to outlining your projects and related expenses.

Record Project Details and Expenditure

The number of projects you describe in the AIF depends on how many projects your claim covers:

• 1 to 3 projects: Provide a description for each project.
• 4 to 10 projects: Select at least three projects that together account for at least 50% of the qualifying expenditure.
• More than 10 projects: Choose at least three projects representing 50% of the expenditure, or the 10 projects with the highest qualifying costs.

For each project, explain the technical or scientific advancements achieved in your field. Include details about the challenges faced, methods used, and the breakthroughs made.

When listing expenses, categorise them clearly. For example, consumable items refer to materials and supplies directly used in R&D projects. Utilities, however, must now be listed separately from consumables.

For subcontractor costs, you can typically claim 65% of payments made to unconnected subcontractors or freelancers for R&D work. Ensure these costs are directly tied to your projects, as only specific subcontractor expenses qualify. Different rules apply if the subcontractors are linked to your company.

Prepare technical and cost reports, along with supporting documents like invoices, timesheets, and purchase orders, to back up your claim.

If your claim period spans more than 12 months, separate AIFs must be submitted for each accounting period. For example, if your period of account runs from 1 January 2024 to 30 June 2025, you’ll need one AIF for 1 January 2024 to 31 December 2024 and another for 1 January 2025 to 30 June 2025.

Submit the AIF well in advance of your Company Tax Return deadline to leave time for any HMRC queries or corrections. Remember, the form must be submitted within two years of the accounting period’s end. Once completed, the AIF helps finalise your RDEC credit calculation and Company Tax Return.

For expert guidance on completing the AIF and ensuring compliance with HMRC’s RDEC claim requirements, visit Zest R&D Tax Advisors.

sbb-itb-8ea0335

Calculating and Checking the RDEC Credit

After completing the Additional Information Form and documenting your R&D projects, the next step is working out your RDEC credit. This determines the exact tax relief you can claim, so accuracy is crucial before including it in your Company Tax Return. Ensuring your figures align with HMRC's requirements helps avoid delays or potential enquiries.

Calculate Qualifying Costs and Credits

The RDEC scheme offers a 20% credit on eligible R&D costs. However, this credit is taxable, subject to Corporation Tax at 25%, leaving a net benefit of roughly 15% of your R&D expenditure.

Start by identifying all qualifying costs from your R&D projects. These may include:

• Staff costs: Gross salaries, employer National Insurance contributions, and pension contributions for employees directly involved in R&D. Use payroll records to detail the time spent on qualifying projects.
• Consumables and software: Materials and software directly used in R&D activities.
• Subcontractor payments: Typically, you can claim 65% of payments to unconnected subcontractors or freelancers for R&D work. For connected subcontractors, different rules apply, so review relationships carefully.

Once you've totalled your qualifying costs, apply the 20% RDEC rate. For example, if your eligible R&D expenditure is £400,000, the credit would be £400,000 × 20% = £80,000. This credit can offset your Corporation Tax liability for the same accounting period. If the credit exceeds your tax liability, the remaining amount can be carried forward to future periods.

Make sure your calculations match your accounting records and Corporation Tax computations. Any inconsistencies could raise red flags during HMRC's review.

If you're claiming for multiple projects, ensure the selected projects on the Additional Information Form represent at least 50% of your total qualifying expenditure. For claims involving 4 to 10 projects, select at least three projects covering at least 50% of the costs. For claims with more than 10 projects, choose either three or more projects representing 50% of the expenditure, or up to 10 projects with the highest qualifying costs.

Finally, ensure your payroll records back up these calculations.

Check PAYE and NIC Compliance

Payroll records, including PAYE and National Insurance Contribution (NIC) data, are essential for submitting an R&D tax relief claim. HMRC uses this information to verify that the staff costs claimed are legitimate and correctly documented.

Cross-check your figures with your payroll records. The gross salaries, employer NIC, and pension contributions you report should match what’s been submitted to HMRC via Real Time Information (RTI). Discrepancies could prompt further compliance checks.

Be ready to provide detailed payroll data to support your claim. This includes employee names, job roles, time spent on R&D activities, and the specific costs attributed to each employee. Your records should clearly show which employees were involved in qualifying R&D work and how much of their time was allocated to these activities.

If you’re working with R&D tax advisors, you’ll need to authorise them to access your payroll data, annual accounts, and Corporation Tax computations. This ensures staff cost calculations meet HMRC’s requirements before submission.

For businesses with complex payroll setups - such as employees working across multiple projects or departments - detailed timesheets or project allocation records are essential. These documents justify the proportion of staff costs allocated to R&D and provide evidence if HMRC conducts a compliance check.

Keep in mind that PAYE and NIC compliance isn’t just about your claim. If HMRC identifies payroll issues during their review, it could lead to broader tax enquiries. Ensuring your payroll processes are accurate and up to date before submitting your claim can help minimise this risk.

Once you’ve verified your RDEC credit calculation and confirmed PAYE and NIC compliance, you’re ready to include the claim in your Company Tax Return. Remember, the Additional Information Form must be submitted before your Corporation Tax Return, and both need to be filed within two years of the end of the accounting period.

For expert assistance with your RDEC credit calculations and ensuring compliance, visit Zest R&D Tax Advisors.

Submitting and Maintaining Compliance

Once you've calculated and verified your RDEC credit, the next step is to finalise your claim and submit it to HMRC. This involves including the claim in your Company Tax Return and ensuring all compliance requirements are met. Make sure to integrate your verified RDEC claim into your CT600 form before submitting it.

Include in the Company Tax Return

Your RDEC claim needs to be submitted as part of your Company Tax Return using the CT600 form. Additionally, you'll need to file the Additional Information Form (AIF) with HMRC before submitting your Corporation Tax Return. Both forms must be submitted within two years of the end of your accounting period.

When completing your CT600, ensure the RDEC credit is included in your Corporation Tax calculations. For companies that are profitable, the RDEC credit will help reduce your Corporation Tax liability for the same accounting period. In some cases, this could even result in a payable refund if tax has already been paid. For loss-making companies, HMRC will issue a payable credit directly.

Double-check that all figures and documents match up. As noted earlier, ensure the numbers align with your AIF and financial records. Cross-reference totals for qualifying expenditure, staff costs, and subcontractor payments. Any inconsistencies could prompt HMRC to open an enquiry.

Include supporting documents to back up your claim. Declare any connected company relationships and state aid where applicable. Keep a copy of your qualification tool results alongside your tax return submission to provide evidence of your eligibility assessment.

Confirm Submission and Keep Records

After including your claim in the CT600, finalise the submission and maintain thorough records. Once you've filed your Company Tax Return, HMRC generally processes RDEC claims within 40 calendar days. If you don't see a payment or tax adjustment within that time, consider following up with HMRC.

Proper record-keeping is essential for HMRC audits. Retain all documents that support your claim, such as detailed project descriptions, technical reports, payroll records, timesheets, and financial statements. These records should clearly outline the qualifying R&D activities, the reasons they meet the criteria, and the associated costs. This documentation will be critical if HMRC decides to review your claim.

Store your records securely and ensure they are easy to access. HMRC can request information for up to six years after the end of the accounting period, so it's important to have a reliable system for organising and backing up your files.

If HMRC initiates an enquiry, respond promptly and professionally. Delays can complicate the process and may raise further concerns. Be ready to explain the technical aspects of your R&D projects in straightforward language that non-technical HMRC officers can understand, while ensuring accuracy.

For companies submitting an RDEC claim for the first time, or those returning after a gap of three or more years, remember to submit your claim notification within six months of the end of your accounting period. Missing this deadline could mean your claim is rejected, even if the R&D work qualifies.

Stay on top of your correspondence with HMRC. They may ask for additional details or clarification, so set reminders for key dates, such as when you expect your credit or need to follow up on any requests.

If you need professional help with filing your RDEC claim and staying compliant with HMRC's requirements, visit Zest R&D Tax Advisors.

Conclusion

A well-prepared submission is the cornerstone of a successful RDEC claim. Every step matters - whether it's verifying eligibility, gathering the right documents, completing forms, or calculating costs. Missing deadlines, overlooking important paperwork, or making calculation errors can not only delay your claim but might also invite an HMRC enquiry.

The key to success lies in thorough preparation. Start by identifying all qualifying R&D projects, ensuring they are categorised correctly. Ideally, these projects should represent at least half of your total qualifying expenditure. This methodical approach helps you maximise your claim while staying compliant with HMRC's guidelines.

Accurate record-keeping is essential. Maintain detailed project descriptions, payroll information, timesheets, and financial statements that clearly demonstrate how your activities meet the R&D criteria. Save the results from the HMRC qualification tool alongside your submission, and ensure all documentation is readily available. These records are crucial if HMRC decides to review your claim.

Meeting deadlines is non-negotiable. Late submissions risk rejection, so staying on top of timelines is critical. The RDEC scheme provides a taxable credit of 20% on eligible R&D costs, with a net benefit of around 15%, depending on your corporation tax rate. Accurate calculations ensure you receive the full benefit, whether that's a reduction in Corporation Tax or a direct cash credit from HMRC.

If you need expert guidance to streamline your application, Zest R&D Tax Advisors can help. They specialise in R&D tax relief, offering support from claim preparation to HMRC compliance, so you can secure the tax credit your innovation deserves with confidence.

FAQs

What happens if I miss the RDEC claim notification deadline as a first-time or occasional claimant?

Missing the RDEC claim notification deadline can lead to significant setbacks, especially for those new to the process or making claims infrequently. If you miss the cut-off, HMRC won’t process your claim for that accounting period, and you could miss out on tax relief for your qualifying R&D activities.

To prevent this, make sure your notification is submitted within six months of the end of the relevant accounting period. Planning ahead and consulting with professionals can help you stay on track and meet all required deadlines.

What qualifies as R&D under HMRC's guidelines for the RDEC scheme?

To be eligible for the RDEC scheme, your company’s work needs to aim at achieving an advance in science or technology. This means tackling uncertainties that skilled professionals in the field cannot easily resolve. The project must relate directly to your company’s trade and go beyond standard development or simply modifying existing technologies.

If you’re uncertain whether your projects fit these criteria, seeking expert guidance can help ensure your submission aligns with HMRC’s expectations.

What should I do if HMRC opens an enquiry into my RDEC claim?

If HMRC decides to review your RDEC claim, staying calm and responding with accurate and timely information is key. At Zest, we manage all HMRC enquiries for our clients without charging extra, ensuring your claim is represented with professionalism and care.

With our team's extensive experience in navigating HMRC’s procedures, you can trust that your claim is being handled by experts.

Related Blog Posts

• How to Calculate R&D Tax Relief in 2025
• R&D Tax Claim Checklist: 10 Essential Steps
• SME vs Large Company R&D Claims Compared
• RDEC vs ERIS: Reporting Requirements Explained