Budget 2026 – R&D tax credits – simplifications to the administration

At last, we can announce some good news for those innovating companies who have been dragged down with endless changes and additional administration in their efforts to obtain those valuable R&D tax credits.

From April 2027 changes will be made as announced in the Budget yesterday to simplify the administration.

Claim Notification Form – being scrapped!

From April 2023, companies wishing to make a claim for R&D tax credits have needed to file a Claim Notification Form (“CNF”) within 6 months of the end of the accounting period for which they wished to file a claim. There were some exemptions to this requirement where claims had been made previously but the rules are complex and it is very easy to get tripped up and think you don’t need to make a claim when in fact it was required.

Failing to file the Claim Notification Form in time when required meant that the R&D claim, even if eligible, and no matter how much work and cost had been incurred, was lost. Totally lost.

As companies are not required to file their end of year accounts until 9 months after the accounting year end, by the time they reach this deadline it is already too late. Innovating companies in particular are focusing on their drive for new technologies and science and it is often the case that the accounting is left until later towards the deadline.

The Claim Notification Form is also not a simple form that just says ‘yes we plan to make an R&D claim’, to complete it you have to give an overview of the work you are doing and the projects and spend you expect to claim so a preemptive form filing is not always possible.

Unfortunately, as a result, lots of companies have missed the Claim Notification Form deadline and have lost out on those valuable tax credits which may have been deeply harmful to their innovation.

The Budget announced that claims made on or after 1 April 2027 will no longer be required to file the Claim Notification Form.

Additional Information Form – simplification

Another change announced at the Budget is the simplification of the Additional Information Form (“AIF”). Currently companies are required to provide additional information in support of their claims through the Additional Information Form which is filed in advance of the claim on the CT600. Anyone involved in R&D will be able to tell you that whilst the form looks simple with only 5 questions demonstrating eligibility for the claim, there is a lot of information required to be included and the guidance on what HMRC are looking for in the form is very weak. The rules for R&D are highly complex and is easy for business owners to therefore trip up if they try to complete the form themselves.

We know that the Additional Information Form is here to stay, many R&D specialists like Alliotts LLP have filed R&D reports in support of claims for a long time before it was mandated through the Additional Information Form, and it has always been something that HMRC have sought to check and ensure eligibility. However, they have said they will simplify it as it is an incredible administrative burden on businesses with the associated cost that these innovative businesses are already struggling with.

Changes for the Additional Information Form will tax effect from Autumn 2027 once announced and we should have details earlier in 2027 so that business owners can prepare for the requirements.

If you need any assistance with your claim or with the changes, please get in touch with our R&D specialists.

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