What is the Additional Information Form (AIF) in an R&D Claim?  

Since August 2023, all R&D tax relief claims require supporting documentation in the form of an Additional Information Form (AIF). This requirement was introduced to target the rising non-compliance in R&D tax relief and, as a result, each submission now includes richer and more consistent information. With this data, HMRC can more accurately identify claims that may require investigation and tackle error and fraud within the scheme. But many advisors struggle with uncertainty while completing the AIF and HMRC’s guidance is not as clear as you might like. Correctly completing this is crucial and can save you from falling into a trap of confusion and potential non-compliance. So, let’s take a look at the key steps involved in filling out an AIF.  

What Details Are Needed for the Additional Information Form? 

The AIF is delivered electronically straight into HMRC’s system and needs to be completed before the company tax return. Make sure you have the following to hand:  

Company Details  

You must include your company’s, VAT number, Unique Taxpayer Reference (UTR), employer PAYE reference number and Standard Industrial Classification (SIC) code. 

Contact Details 

Include these details to highlight who in your business is overseeing the claim. If there are any further questions surrounding the AIF, the person named in this section will be responsible for responding. You should also include the contact details of any ‘agent’ involved in the work. An agent is anyone who’s had a hand in preparing the claim, from a technical assessor to a financial analyst.  

The Company’s Financial Period  

It’s crucial this included in the AIF. If this is incorrect, HMRC can reject your form.  

Details of the R&D Project

HMRC will want to know the number of R&D projects you’re claiming for and the details surrounding the following. Project descriptions should include:  

The main field of science of technology that relates to the project 

For instance, science is the systematic study of the nature and behaviour of the physical and material universe. However, technology is the application of scientific principles or knowledge. Both fields would include, architecture, mechanical engineering or software development so choose which category your project relates to.  

The baseline level of science or technology that the company planned to advance  

The baseline level of knowledge is what currently exists in the wider industry. Explain the level of knowledge at the beginning of your project and what the company aimed to improve. For instance, if you were planning to enhance an existing material, explain its current features and how you advanced them. 

What technological or scientific uncertainties were being addressed during the work?  

What uncertainties did you encounter in your project and how did you overcome these? If there are any barriers in your work, explain what is preventing the advancement, why it’s a broader industry uncertainty and why a competent professional would also face this uncertainty.

How Many Project Descriptions are Required for R&D claims? 

Do I Claim For the SME or RDEC scheme?  

When filling in the AIF, you must select which scheme you’re applying for. Larger corporations qualify for the RDEC scheme while small to medium companies will use the SME incentive. However, there are some exceptions so be sure to double check. These schemes are not calculated in the same way. The benefit from RDEC comes as an ‘above the line’ expenditure credit whereas the SME scheme reduces the corporation tax bill.   

Qualifying Costs and Expenditure  

Eligible R&D costs for both RDEC and SMEs include:  

• Staff 
• Externally Provided Workers (EPWs) 
• Consumables 
• Data licences  
• Subcontractors  
• Cloud computing (included after April 2023)  

It’s important to separate direct and indirect costs in the AIF. Direct activities have an immediate impact on the project as opposed to indirect costs which don’t directly solve the scientific or technological uncertainty.  

A Step-by-Step Guide to Completing the Additional Information Form 

Following these steps can ensure a smooth process:  

• Compile Required Documents: Ensure you have all necessary documents, such as project reports and financial statements. 
• Explain the R&D Activities: Supply a detailed description of the R&D activities undertaken.  
• Personal and Company Information: Enter accurate details about your company. This might include people who were not directly involved with the project. For instance, directors and financial controllers might be the main contact.  
• Financial Information: Report all financial information related to your project.   

For instance, a medical company developing a new health product would successfully detail their hypothesis, stages of development and how the product has advanced a particular part of science.  

Common Mistakes When Filling Out the Additional Information Form 

When filling out the AIF, be sure to fill in all information completely and accurately. Double check all calculations are correct and avoid missing out key information. It’s worth involving another pair of eyes to double check all the information on your form. Whilst you can’t add additional information to the AIF, you can include supporting documentation to the return when filing.  

Allocate time for proofreading and set aside dedicated time to review the form thoroughly. If you can, use grammar and spell-check tools to identify and correct basic errors. However, be wary as these tools might not catch all errors, particularly those related to context or meaning. 

What If I Don’t Comply with HMRC guidelines?  

Non-compliance with AIF guidelines could mean your claim is denied outright by HMRC. This can lead to experiencing delays in receiving your tax relief and may impact your profitably.  Even if the claim is not flat out rejected, HMRC may send out an enquiry which adds extra administrative and financial pressure.  

Not correcting errors in the AIF could also incur missing the claim window entirely. You have a two year window to submit so make sure you don’t leave it too late. In exceptional circumstances this can be resolved but it’s very unlikely.  

What Happens When I Submit My Additional Information Form?  

You can submit the AIF if you’re a representative of the company. Make sure you use your Government Gateway user ID to login.  Once the form has been submitted you won’t be able to access it so ensure you save a copy before submission.  

What Should I Expect After Submitting Your Form? 

HMRC will confirm receipt of the AIF and issue you a reference number. Make sure you keep a record of this so you can discuss any queries you have with HMRC. Once this has been completed, you can progress your R&D claim! HMRC states it aims to process 95% of R&D Tax Credits claims within 28 days. In our experience, processing times can range from anywhere between 20 and 100 days. You’ve then got to wait up to 20 days for the money to be transferred into your account. In total, it can take up to 120 days to receive your R&D Tax Credits. 

Completing the Additional Information Form for a Successful Claim  

The AIF is a crucial step to a successful R&D claim. But it’s an intricate process that can catch out many applicants. By following a meticulous process and involving the right advisor, can make the process much easier. The introduction of the AIF has pushed forward HMRC’s goal of targeting non-compliance and tackling fraud as it allows them to fully understand the nature of the R&D.  Whilst the AIF is important, it won’t bullet proof you against HMRC enquiries. Trust an expert to manage your R&D tax claim and maximise your chance of success.