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How do I enter R&D enhanced expenditure (for SMEs) on my CT600?

Article ID: 918
Last updated: 05 Oct, 2020

When you make a claim for research and development (R&D) enhanced expenditure for small and medium sized enterprises (SME's), you need to enter figures to adjust the computation to receive relief for the additional 130% of qualifying costs. 

If there is a loss, you may also need to make a claim to surrender any losses, to receive the 14.5% credit.

If you are claiming the research and development expenditure credit (RDEC) for large companies, or you are claiming for an SME that has sub-contracted for a large company, please read our knowledgebase article on How do I enter a Research and Development Expenditure Credit (RDEC) on my CT600?

Entries for SME enhanced expenditure claims can be made in SimpleStep or HMRC Forms mode, as follows. 

CT600 (Version 3 for periods commencing after 1 April 2015)

SimpleStep mode

  1. Go to CT600 Core> CAs and Enhanced Expenditure > Enhanced expenditure.
  2. Complete the entries on screen as required.
  3. Tick box 650 (SME)
  4. Enter the total enhanced expenditure in box 660  or use the wizard to assist- in which case enter the amount of qualifying expenditure and you will see that the rate of 230% has been applied to calculate the total value of enhanced expenditure. 130% is the additional deduction made in the computation as 100% has already been claimed in the profit and loss account.

Computational adjustment

This is the where the difference between the 100% that you claimed in your accounts as the expense, and the total calculated enhanced expenditure (230%) is entered. The additional 130% is claimed as an adjustment to profit.

  1. Go to CT600 Core > Trade and professional income > Tax adjusted profit/loss  other adjustments.
  2. Enter the figure for Research and development to adjust the profit chargeable to tax as required. If you used the wizard previously, then this will be populated automatically.

Surrendering the loss

  1. Go to CT600 > Trade and professional income > Losses, Management expenses, NTLRDs and NTLIFAsTrading losses record.
  2. Enter the figure for Loss Surrendered for R & D tax credit.

Claiming repayment for the credit

  1. Go to Overpayments and repayments > Repayments for the period
  2. Enter the amount of the tax credit in box 875

HMRC Forms mode

  1. Go to CT600 > Core > Page 7.
  2. Go to the section for R&D or creative enhanced expenditure.
  3. Tick box 650 (SME).
  4. Enter the total enhanced expenditure in box 660  or use the wizard to assist- in which case enter the amount of qualifying expenditure and you will see that the rate of 230% has been applied to calculate the total value of enhanced expenditure. 130% is the additional deduction made in the computation as 100% has already been claimed in the profit and loss account.

Computational adjustment

This is the where the difference between the 100% that you claimed in your accounts as the expense, and the total calculated enhanced expenditure (230%) is entered. The additional 130% is claimed as an adjustment to profit. 

  1. Go to CT600 > Computations > Tax adjusted profit/loss – other adjustments.
  2. Enter the figure for Research and development to adjust the profit chargeable to tax as required. If you used the wizard previously, then this will be populated automatically.

Surrendering the loss

  1. Go to CT600 > Computations > Losses, Management expenses, NTLRDs and NTLIFAs > Trading losses record.
  2. Enter the Loss surrendered for R&D tax Credit.

Claiming repayment for the credit

  1. Go to CT600 Core > Page 10 > Repayments for the period covered by this return
  2. Enter the amount of the tax credit in box 875

For further information read Corporation Tax: Research and Development tax relief for small and medium sized enterprises on the HMRC website.

Enhancement and surrender rates
Period Enhancement Rate Surrender Rate
Before 31/03/2011 175% 14%
01/04/2011 - 31/03/2012 200% 12.5%
01/04/2012 - 31/03/2014 225% 11%
01/04/2014 - 31/03/2015 225% 14.5%
After 01/04/2015 230% 14.5%
Article ID: 918
Last updated: 05 Oct, 2020
Revision: 8
Views: 14372
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Also listed in
folder Tax Return Production -> CT600 Corporation Tax Return