Service issues

Annual investment allowance

The Autumn Budget 2021 extended the annual investment allowance provisional £1 million cap until 31 March 2023. The extension of the temporary £1 million cap was originally due to revert to £200,000 on 1 January 2022, but this will now happen on 1 April 2023.

The Corporation Tax online service will be updated to reflect this change by 30 June 2022. You can file online before the service is updated if you’re filing a return and you do not need to claim this additional annual investment allowance.

Loans to participators

The Autumn Budget 2021 raised the rate of tax charged under section 455 on loans to participators from 32.5% to 33.75% from 6 April 2022.

The Corporation Tax online service will be updated to reflect this change by 30 June 2022. You can file online before the service is updated if you’re filing a return and you do not need to report this increase.

Research and Development claims

In 2021, HMRC introduced supplementary form CT600L for companies claiming either of the following credits:

  • small and medium enterprise (SME) Research and Development payable tax credit
  • Research and Development expenditure credit

Companies only claiming Research and Development enhanced expenditure are not required to complete this supplementary form and just use box 660 on the CT600 to report their claim.

Due to a recent update to the CT600 and CT600L forms, HMRC are aware that a small number of customers may have online filing issues due to some restrictions within the revised HMRC Corporation Tax online service.

Companies claiming Research and Development enhanced expenditure, but not SME payable tax credit or Research and Development expenditure credit

Customers will only be affected if both the following apply:

  • your accounting period starts on or after 1 April 2022
  • you are only claiming Research and Development enhanced expenditure (included in box 660) but no other Research and Development credits so would not be completing a CT600L

The service will be updated by 30 June 2022 to fix the issue and affected customers should wait until then to file your return.

Companies claiming Research and Development expenditure credit and reporting Income Tax deducted from profits

Customers will only be affected if you are reporting both:

  • an amount carried forward under section 104N(2), step 2 of the Corporation Tax Act 2009, from a previous accounting period (included in box L5)
  • Income Tax deducted from profits (included in box L35)

The service will be updated by 30 June 2022 to fix the issue and affected customers should wait until then to file your return.

If you have a deadline or an urgent requirement to file your return before 30 June 2022, HMRC will accept a paper return for these exceptional cases. In this instance, a paper return should include:

  • form WT1, explaining (in box 6) that your Research and Development claim includes Income Tax deducted from profits — place this form under your return
  • form CT600
  • form CT600L
  • your accounts and computations

Send your paper return to:

Corporation Tax Services
HM Revenue and Customs
BX9 1AX
United Kingdom

Companies claiming Research and Development expenditure credit and reporting an amount of brought forward step 2 restriction to be carried forward to the next accounting period

This is for information only as it will not affect your ability to submit a CT600L to the HMRC Corporation Tax online service.

A new pre-step 1 section has been added to the CT600L for customers to report the amount of step 2 restriction brought forward from previous accounting periods. Any balance not used and carried forward to the next accounting period is captured in new boxes L8 and L129.

The figure in box L129 is correctly included in box L140 — balance carried forward to next accounting period, but has been captured twice in box L150 — total carried forward to next accounting period. This means that your software will be reporting an incorrect figure in box L150, but this is used by HMRC for statistical purposes only.

The figure in box L129 will be the one included in box L5 in your next Corporation Tax Self Assessment.

 

To talk to our Capium Sales Team about how we can help with your software needs, call us on 02033225578 or email us to info@capium.com.

 

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