How to Make Claims or Elections for Corporation Tax

When your company is eligible for Corporation Tax reliefs or wants to choose how certain assets or transactions are treated for tax purposes, you need to formally tell HMRC through a claim or election. Getting the process right and meeting the deadlines is crucial—otherwise you could miss out on valuable tax savings.

What are claims and elections?

A claim is how you tell HMRC that your company is entitled to a relief that reduces either your taxable profit or the amount of Corporation Tax you need to pay. This could include reliefs for research and development, patent box benefits, or loss relief, among many others.

An election allows you to choose a particular way of having your company's affairs treated for Corporation Tax purposes. For example, you might elect to treat a business asset as a short-life asset for capital allowances purposes, which lets you write off the cost of that asset over its actual lifetime rather than being restricted to standard capital allowances rates.

The key difference: claims are about accessing reliefs you're entitled to, while elections are about choosing between different tax treatments where HMRC gives you options.

What you need to include in a claim

When making a claim, you must:

• State the amount you're claiming in figures
• Include enough information to fully describe what you're claiming for

Different reliefs require specific information, so you should check the detailed rules in the relevant HMRC manual before submitting your claim. What counts as "enough information" varies depending on the relief—a research and development claim, for instance, requires much more detail than a straightforward capital allowances claim.

What you need to include in an election

Your election must clearly state:

• What your company is choosing to do
• Which accounting periods the election applies to

This clarity matters because some elections have restrictions on how often you can change them, and others apply indefinitely once made. Always check the specific rules before making an election—you may be stuck with your choice for longer than you expect.

When and how to make your claim or election

Claims and elections should be made in your Company Tax Return, or submitted alongside it. This is because they affect your Corporation Tax calculations and the amount of tax you owe.

If you didn't make the claim or election in your original return, and you're still within the time limit to amend your return, you have two options:

• Send HMRC a completely revised (amended) Company Tax Return
• Make your claim separately in writing to Corporation Tax Services—HMRC will treat this as an amendment to your return

If you're a large business customer, write directly to your Customer Compliance Manager instead.

Time limits you need to know

Most claims and elections have specific time limits, and after the deadline passes you may lose the ability to claim altogether. Don't delay making claims or you risk missing out on tax relief.

The general rule: if no specific time limit applies to a particular claim or election, you have 4 years from the end of the Corporation Tax accounting period the claim relates to.

Many reliefs have the same time limit as the deadline for delivering or amending your Company Tax Return.

Some reliefs can't be claimed until you've delivered your return for the relevant period. For example, if you're carrying back a loss to a previous accounting period, you need to submit your return for the period when the loss arose before you can claim relief for it in the earlier period.

Late claims

For some reliefs—including losses, capital allowances and group relief—HMRC can sometimes accept a late claim after the normal time limit has ended. If you're making a late claim, write to Corporation Tax Services (or your Customer Compliance Manager if you're a large business) and explain why HMRC should accept it.

Correcting mistakes in claims or elections

If you discover you've made an error in a claim or election, you can correct it by amending your Company Tax Return—provided you're still within the time limit for amendments.

If you're outside the amendment window, or outside the time limit for revising the specific claim or election, you should write to Corporation Tax Services (or your Customer Compliance Manager for large businesses) to inform them of the mistake.

Be aware that HMRC may issue an assessment to collect any tax that was underpaid as a result of the error.

HMRC compliance checks

HMRC can request more information about your company's claim or election by conducting a compliance check (sometimes called an enquiry). If the claim or election was included in your Company Tax Return, it may be checked as part of an enquiry into that return.

Even if the claim or election wasn't made in a return or amendment, HMRC can still check it, though they use a slightly different process.

Key takeaways

Making claims and elections properly is essential for managing your company's Corporation Tax bill. The crucial points to remember:

• Make claims and elections in your Company Tax Return or alongside it
• Include all required information and figures
• Don't miss the deadlines—you have 4 years from the end of the accounting period if no specific time limit applies
• Check the specific rules for your relief in HMRC manuals before claiming
• Some elections apply indefinitely, so think carefully before making them
• You can correct mistakes by amending your return if you're within the time limits

When in doubt about whether you qualify for a relief or which election is best for your circumstances, seek professional advice before the deadline passes.

Sources

• Corporation Tax: how to make a claim or election

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.