Changes and issues affecting the Corporation Tax online service

Capital allowances — new 40% first-year allowance

CheckAt Budget 2025, the followinggovernment announced a 40% first-year allowance for qualifying expenditure incurred on plant or machinery on or after 1 January 2026.

We’ll update the Corporation Tax online service issues.in April 2027 to support the new allowance. 

To claim the relief before then, you can use the existing capital allowance boxes on form CT600. Use:

• boxes 725 or 750 for claim amounts
• box 760 for qualifying expenditure

If you do not need to report this new relief, you can file online in the normal way.

New requirements for Company Tax computation format

Most companies areneed required to include a computation when submitting their Company Tax Return. This computation:

• is typically generated by your accounting software
• includes the necessary eXtensible Business Reporting Language (XBRL) tagging

To improve consistency and provide clear expectations, HMRC is introducing standardisation for certain parts of the computation. The first two2 areas being addressed in this release are:

• accounts adjustments
• capital allowances

AdditionalWe’ll sectionsintroduce willadditional besections introduced in future updates.

What you need to do

In most cases, no action is required.needed. Your software provider should implement these changes automatically.

However,to iflearn you’dmore likeabout to understand the new requirementsrequirements, in more detail, including the content, format, and XBRL taggingtagging, you can read about the HMRC prescriptions of computations (PDF, 517 KB, 59 pages).

The This document outlinesexplains how HMRCto expectscomplete these sections of the computation to be completed and includes:

• detailed tables
• explanatory notes

First-year allowance for zero-emission cars

AsThe announced at Autumn Budget 2024, the 100% first-year allowance for qualifying expenditure on zero-emission cars has been extended to 31 March 2026 for Corporation Tax purposes.purposes.

A Findsmall outnumber moreof aboutcompanies capitalmay allowances.

Wenot arebe awareable thatto areport smalltheir numberclaim for this allowance in boxes 726 and 751 of form companiesCT600 withif they both:

• have an accounting period starting on or after 1 April 2025 and that
• intend to submit their tax return before April 2026, may be unable to report their claim for this allowance in boxes 726 and 751 of the CT600.
  2026

InWe’ll Aprilupdate 2026, the Corporation Tax online service willIn beApril updated2026 to support the extended period for claiming this first-year allowance.

If Before April 2026, if you do need to submit a claim for an accounting period:period beginning:

• beginning before 1 April 2025, you can continue to do so using boxes 726 and 751
• beginning on or after 1 April 2025, report your claim in boxes 725 and 750 (other allowances and charges)

Research and Development expenditure credit (RDEC) claims

HMRC introduced the additionalSubmit information formto support your Research and Development (R&D) claim on form on 8 August 2023. You must submit this for all claims for Research and Development (R&D) tax relief or expenditure credit.

Research and Development expenditure credit (RDEC) claims which are exempt from the PAYE cap

The merged scheme R&D expenditure credit (RDEC) and enhanced R&D intensive support (ERIS) replaced the old RDEC and small and medium-sized enterprise (SME) schemes for accounting periods beginning on or after 1 April 2024.

WeThere’s are aware that there is no option on theform CT600L for customers to indicate that theythey’re are claiming exemption from the PAYE cap under the merged scheme.

A company can only claim to be exempt if theythey’re are creating or managing intellectual property under section CTA09/S1112E of the Corporation Tax Act 2009(CTA) (CTA)2009

If youyou’re are claiming an exemption, you should make sure that the amount entered in box L75 equals the amount entered in box L70. This is so that the amount of step 3 restriction carried forward to the next accounting period in box L80 is ‘0’.

YouYou’ll mustneed alsoto addtell aus notethat inyou’re yourclaiming computations,an orexemption inunder asection PDF1112E attachmentCTA with2009.

You yourcan Corporationnote Taxthis return,either thatin:

• your youcomputations
• a arePDF claimingattached anto exemptionyour underCorporation sectionTax 1112E CTA 2009.
  return

WeWe’ll will update the service in April 2026 to fix this issue.

Creative industries

HMRC introduced the additionalSupport informationyour formclaim for creative industry tax reliefs on form on 1 April 2024. You must submit this for all claims for creative industry tax reliefs or creative industry expenditure credits alongside the Company Tax Return. Use this new mandatory form to share supporting evidence, either before or on the same day the Company Tax Return is submitted.

HMRCWe planned to introduce new supplementary form CT600P for all creative industry claims for returns submitted from April 2025.

DueIf toyou aclaim restriction within the updated HMRC Corporation Tax online service, we are aware that customers claiming one or more of the creative reliefs and creditscredits, you will not be unableable to include theform CT600P with theiryour return.

We haveThis thereforeis decideddue to temporarilya postponerestriction in the Corporation Tax online service.

Because of this, we’ve postponed the requirement to include theform CT600P in your return until April 2026. In the meantime, you should use thisthe following guidance.

Cultural Reliefs and Film, High End TV, Children’s TV, Animation and Video Games tax relief

Complete Complete:

• box 540 with the gross amount of your credit claim and
• box 885 with any balance of payable tax credit.
  credit

Audio-Visual Expenditure Credit (AVEC) and Video Games Expenditure Credit (VGEC)

If your software supports the new AVEC and VGEC boxes 541 and 886, complete complete:

• box 541 with the gross amount of AVEC or VGEC and
• box 886 with the balance payable.
  payable

If your software does not support the new boxes, complete complete:

• box 540 with the gross amount of AVEC or VGEC and
• box 885 with the balance payable.
  payable

InAs additionwell toas the gross amount of AVEC or VGEC, there are other amounts you should include in box 540 or 541. For more information, read the guidance on completingCompleting your companyCompany taxTax returnReturn.

Read more about the new creative industry expenditure credits.