14 May 2021

Changes to Corporation Tax Returns

With the changes announced in recent budgets, HMRC has been required to make some adjustments to the corporation tax return. Read our latest article below to ensure you are up to date with the latest information... 

What changes are happening?

One of the differences includes a new supplementary page, known as CT600L, which is to be used for research and development claims from 1st April 2021. The page will be used for claims, or amendments to claims, under the small and medium-sized research and development regime as well as the research and development expenditure credit regime.

Unfortunately, some agents have reported that they have been unable to access the supplementary page to complete it for their clients as the software they are using has not been updated so that the supplementary page can be generated. Anyone experiencing these issues is advised to firstly speak with their software provider, or if the return is urgent and there isn't time to wait for digital access, HMRC will accept the corporation tax form and supplementary pages by post.

Returns submitted by post should, of course, include the return and any relevant supplementary pages. Form WT1 should also be included and should be placed on top of the return to draw attention to it. Form WT1 must include an explanation in box 6 that your software has not been updated and therefore you are submitting by post.

HMRC has also noted on their website that a small number of customers may be unable to submit the correct figures in the CT600L and this is due to a restriction within the HMRC Corporation Tax online service. It is believed that only a small number of customers will be affected, specifically, if they are reporting:

  • previous years that have been carried forward under section 104N(2), step 3 of the Corporation Tax Act 2009 (box L50) where the step 1 balance is then carried into step 2.
  • an amount carried forward under section 104N(2), step 3 of the Corporation Tax Act 2009 (box L20) which is from a previous accounting period and that has not been fully set against the corporation tax liability for the current period.

HMRC expects the service update to fix these issues, and this will take place before 31st May 2021. Where possible, any customers who are affected should wait until the service update before they file their return. However, HMRC will accept a paper return submitted by post if there is a deadline or otherwise urgent requirement to file the return before 31st May 2021, and customers are advised to follow the same guidance as noted above.

Other changes have been made to the CT600 released on 1st April to include boxes relating to the receipt of support relating to Covid-19. Boxes 471 to 474 are for claims under the Coronavirus Job Retention Scheme, or the furlough scheme as it is more commonly known, and the Eat Out to Help Out scheme. Any overpayments relating to these schemes should be entered in box 526. Any reimbursed discounts that the company has received under the Eat Out to Help Out Scheme, and which have been included as taxable income should be entered in box 647.

This is new information which agents may not be used to requesting from their clients and so should be factored into information request processes. As with the CT600L, agents are advised to check with their provider that their tax return software can be used to complete these boxes. Information on the changes made to Corporation Tax Returns can always be found on HMRC's website, together with advice as to what to do if there is a problem. Agents working on behalf of clients can also keep up to date with developments through their regulatory body.

Don't miss out on opportunities to become more tax efficient...

Get in touch with us, let us help you! Our team of tax experts can offer business advice and help you maximise your tax efficiency. Contact our Director, Nick Bonnello, today on 0115 964 8860 or email him at nickb@rwbca.co.uk to find out how we can help you across all areas of your business.

The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.