An R&D notification is the first step in any claim (and potential pitfall!), which is crucial for a Company intending to make an R&D claim. If a Company either does not meet the exemption criteria or does not submit the notification within time, then the chance to make a claim will be lost in full.
Although it only applies to accounting periods beginning on or after 1 April 2023 if:
- The Company in question is claiming R&D for the very first time;
- The last claim that the Company submitted to HMRC was made more than three years before the last date of the ‘claim notification period;’
- The last claim the Company submitted was an amendment to a tax return for a period beginning before 1 April 2023, but the amended return was submitted after this date.
Therefore, companies that have continuing R&D will not be affected, unless this has been done via your advisor completing an amended return. Whereas those not already claiming or have not claimed in any of the previous accounting periods, will need to action this as early as possible, following the end of the accounting period the company intends to claim for.
The time limits (Claim Notification Period) for submitting the pre-notification that will be in place are as follows:
- The earliest date is the first day of the accounting period to which the claim relates – i.e. the first day of your accounting period.
- The latest date is six months after the end of the period of account that includes the relevant accounting period – i.e. 6 months after the end of your accounting period.
The Claim Notification is made for a period of account and will cover any accounting periods that fall within that period of account. For example, a long period of account will only require one notification to be made, and this also does not mean that a company must submit a return. Rather, this is a process to ensure that a claim can be made if a company intends to.
In the first couple of years of development it is common to see R&D claims combined for multiple years at a time as in some cases costs in those years may be minimal and not themselves worth the cost of claiming for until combined with later years. However, the notification requirement throws a spanner in the works for this approach as those first periods would not be claimable as no notification would have been made within 6 months of the period end. As such, it is absolutely vital that if you have even a small intention of making a claim for that accounting period a notification is submitted to ensure this is possible and the chance of relief is not lost.
What’s required to complete a Notification?
As it currently stands, companies are required to provide details on the following:
- The Unique Tax Reference (UTR) number of the company;
- Contact details of main internal R&D contact at the company;
- Contact details of any agent involved in the R&D claim and agent reference number;
- Period of account start and end dates, which must correlate with your tax computations;
- Start and end dates of the accounting period that you will be claiming R&D Tax relief; and
- A short description of the nature of the work being conducted by the company.
If you have any queries related to the notification process or an R&D claim as a whole, feel free to reach out at rdtax@ct.me.
