Changes and issues affecting the Corporation Tax online service

Capital allowances — new 40% first-year allowance

At Budget 2025, the government 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 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 need 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 2 areas being addressed in this release are:

• accounts adjustments
• capital allowances

We’ll introduce additional sections in future updates.

What you need to do

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

To learn more about the new requirements, including the content, format and XBRL tagging, read the file ‘CT Computations Format’. This document explains how to complete these sections of the computation and includes:

• detailed tables
• explanatory notes

First-year allowance for zero-emission cars

The 100% first-year allowance for qualifying expenditure on zero-emission cars has been extended to 31 March 20262027 for Corporation Tax purposes.

A small number of companies may not be able to report their claim for this allowance in boxes 726 and 751 of form CT600 if they both:

• have an accounting period starting on or after 1 April 20252026
• intend to submit their tax return before April 20262027

We’ll update the Corporation Tax online service Inin April 20262027 to support the extended period for claiming this first-year allowance.

If you need to submit a claim for an accounting period beginning:

• before 1 April 2025,2026, you can continue to do so using boxes 726 and 751
• on or after 1 April 2025,2026, report your claim in boxes 725 and 750 (other allowances and charges)

Research and Development expenditure credit (RDEC) claims

HMRC introduced the Submit information to support your Research and Development (R&D) claim 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 claims which are exempt from the PAYE cap

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

There’sWe noare optionaware onof forman CT600Lissue with the validation for customersthe tonew indicateboxes thatallowing they’recustomers to claimingclaim exemption from the PAYE cap under the merged scheme.

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

If you’re claiming an exemption, 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 is carried forward to the next accounting period in box L80 is ‘0’.

You’ll need to tell us that you’re claiming an exemption under section 1112E CTA 2009.

You can note this either in:

• your computations
• a PDF attached to your Corporation Tax return

We’ll update the service in April 20262027 to fix this issue.

Creative industries

HMRC introduced the Support your claim for creative industry tax reliefs 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.

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The Expenditureentry Creditin (AVEC)column E must be less than the entry in column D. The service will not accept a zero in both of these columns for boxes P260 to P305.

In these cases you should enter £1.00 in column D so your return can be accepted. This will not affect the validity of your claim.

The service will be updated in April 2027 to fix this issue.

The sections of the CT600P relating to Audio-Visual and Video Games Expenditure Credit (VGEC)

are not affected.

Loans to participators

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Corporation Tax online service will be updated to reflect this change on 6 April 2027.

If the new rate applies to your softwarecompany doesand notyou supportneed to file before 6 April 2027, you’ll need to amend your return after 6 April 2027 to reflect the new boxes,rate.

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• detailed tables
• explanatory notes