HM Revenue and Customs (HMRC) has announced a series of updates and clarifications regarding the Corporation Tax online service, following recent reforms and new tax reliefs.
As of early 2026, a range of enhanced capital allowances, updated tax computation requirements, and changes to research and development (R&D) relief claims will apply.
Companies affected by these modifications are advised to review how they prepare and submit their tax returns, as adjustments to both mandatory forms and submission processes are being implemented.
These changes are aimed at improving consistency, supporting new legislative measures, and simplifying the reporting of complex reliefs for UK businesses.
Introduction of 40 Percent First-Year Allowance
In its 2025 Budget, the government announced the introduction of a 40 percent first-year allowance for qualifying expenditure on plant and machinery, applicable to assets acquired on or after 1 January 2026.
HMRC has stated that the Corporation Tax online service will be updated by April 2027 to accommodate claims for this new relief. Until this update is in place, companies seeking to claim the new allowance should use the existing capital allowance boxes on form CT600 specifically, boxes 725 or 750 for claim amounts and box 760 for qualifying expenditure. Routine online filings can proceed as usual for businesses not claiming the allowance.
Updated Company Tax Computation Requirements
HMRC has announced the standardisation of certain sections within the Company Tax computation, a critical document accompanying most Corporation Tax Returns. Computations are typically generated by accounting software and must comply with eXtensible Business Reporting Language (XBRL) tagging requirements.
The first areas targeted by this new standardisation are accounts adjustments and capital allowances. HMRC plans to introduce further standardised sections in future updates.
Most companies will not need to take specific action, as software providers are expected to implement these updates automatically. Detailed guidance, including tables and explanatory notes, is available in the ‘CT Computations Format’ file.
Extended First-Year Allowance for Zero-Emission Cars
The government has extended the 100 percent first-year allowance for qualifying expenditure on zero-emission cars to 31 March 2026. HMRC noted that some companies may experience difficulties reporting claims if their accounting period begins on or after 1 April 2025 and they intend to submit their tax return before April 2026.
An update to the online Corporation Tax service is expected in April 2026 to accommodate this extension. In the interim, claims for periods starting before 1 April 2025 should continue to use boxes 726 and 751 on form CT600. For periods commencing on or after 1 April 2025, claims should be made using boxes 725 and 750.
Changes to Research and Development Expenditure Credit Claims
Since August 2023, all claims for R&D tax relief or expenditure credit must be accompanied by the 'Submit information to support your Research and Development (R&D) claim' form. Recent changes from April 2024 include the launch of a merged scheme for R&D expenditure credit and enhanced R&D intensive support, replacing previous schemes.
Currently, form CT600L does not provide an option for companies to indicate an exemption from the PAYE cap under the merged scheme. HMRC advises that companies claiming this exemption, available to those creating or managing intellectual property under section 1112E of the Corporation Tax Act 2009, ensure that values in boxes L70 and L75 match so that no restriction is carried forward in box L80. Companies must also note their exemption either in their computation or as a PDF attachment. An online update to resolve this is planned for April 2026.
New Procedures for Creative Industries Relief Claims
From April 2024, a new form is required to support claims for creative industry tax reliefs and expenditure credits, with submission alongside the Company Tax Return.
The planned introduction of supplementary form CT600P for all creative industry claims has been postponed to April 2026 due to an online service limitation. In the interim, those making claims should continue to report the gross credit amount in box 540 and any payable tax credit balance in box 885.
For those whose software supports the new Audio-Visual Expenditure Credit (AVEC) and Video Games Expenditure Credit (VGEC) boxes 541 and 886, these should be used for the respective credit and balance amounts. Further details on completion requirements are provided in HMRC’s published guidance.
Final Summary
These recent changes to the Corporation Tax online service reflect efforts by HMRC to streamline reporting processes, facilitate the introduction of new fiscal measures, and support accuracy in corporate tax filings.
Businesses should familiarise themselves with relevant transitional arrangements for the new first-year allowances, R&D claims, and creative industry tax credits.
As future online service updates are delivered, companies can expect improved guidance and automation of compliance requirements.
For companies seeking to stay current with HMRC mandates and reporting standards, tailored updates and finance features are available through the Pie app, helping businesses remain informed and compliant with evolving tax regulations.
