New Era for R&D Claims from 8 August 2023

Weekly newsletter in which we cover changes to the R&D tax credit claim submission process using the new Additional Information Form. Plus other updates

New Era for R&D Claims from 8 August 2023

In today's newsletter we cover:

  • 🔜 New Era for R&D Claims from 8 August 2023
  • 🍾 New SEIS Limits (Finally!) Approved
  • ⚠️ Be Aware: 7.5% Interest on Late Payments
  • 🤓 Capitalising on HMRC's Interest Rate
  • 🧠 Links to think
  • 🚀 Links to do

🔜 New Era for R&D Claims from 8 August 2023

If you're an innovative company that claims R&D tax relief, take note...

Starting from the 8th of August 2023 (formerly touted as 1 August 2023), there's a brand-new form in town, and it's something you'll need to get familiar with.

It's called the Additional Information Form, lovingly dubbed the 'AIF'.

Why is this important? This isn't just a run-of-the-mill small update – it's a completely new form that needs to be prepared and filed for ALL R&D claims moving forward. Yes, you read that right, all claims.

Oh, and expect hiccups, tears, tantrums and teething problems as this new system beds down (you know what a match-made-in-heaven HMRC is with new IT systems, right...?!😳)

Deeper Dive: Here's a short video that blasts through the 'new' requirements within the AIF form (I say 'new', we've provided this level of information for all our past claims so there shouldn't be any massive shocks for our clients).

Get ready to embrace this new era of R&D claims. It's all part of the journey, right? Together, we'll navigate these changes. Stay tuned for more updates!

🍾 New SEIS Limits (Finally!) Approved

The wait is over: the new SEIS limits are now formally enacted in law having received Royal Assent in early July.

Why is this important? The increased SEIS limits were meant to have come into effect since 6 April 2023. But first they needed to pass through the various stages of enactment before they were passed into law. Read more here.

This process takes time.
Leaving us (read: founders / investors / advisors / HMRC) in a state of hiatus...

From now:
✅ founders can go ahead and issue shares under SEIS using the new £250k limit
✅ founders can apply for tax certificates for investors under the new limits
✅ investors can use up their increased £200k SEIS allowance (from 6 April 2023)
✅ companies that have been trading for more than 2 years (but less than 3 years) plus those that have gross assets of more than £200k (but less than £350k) can now move forward with confidence
✅ HMRC advance assurance applications become more straightforward as neither party has to set out the nuances of the previous hiatus position!

⚠️ Be Aware: 7.5% Interest on Late Payments

Prepare for your personal self-assessment payments due by 31 July.

Be sure to pay on time to avoid late payment interest charges from HMRC, which currently stand at a significant 7.5% - the highest rate in over 15 years!

🤓 Capitalising on HMRC's Interest Rate

It's crucial to settle your personal tax on time to avoid late payment interest (see above). However, there's also a cheeky little strategy on the flip-side.

If you have a tax bill and have surplus cash, consider settling it early to earn interest from HMRC at a current rate of 4%. This approach bypasses the need to worry about bank risk in the current climate and the Financial Services Compensation Scheme protection limit of £85k.

It may seem counterintuitive to suggest early tax payments (it's certainly a first for me!), but right now (if you have no other plans for your spare cash), it might be a financially savvy move! Just check with me or your accountant first.

Photo by Dawid Zawiła / Unsplash