Research & Development (R&D) tax credits provide valuable relief to businesses investing in innovation. However, recent changes require companies to comply with new pre-notification rules for R&D claims. Missing these requirements could result in losing out on this beneficial tax relief.
R&D Claims pre-notification – Who needs to submit pre-notification?
The pre-notification requirement applies to:
- Companies claiming R&D tax relief for the first time.
- Companies that haven’t made an R&D claim in the past three years.
This rule affects businesses under both the Research and Development Expenditure Credit (RDEC) and Small and Medium-sized Enterprises (SME) regimes, even after the schemes merge for accounting periods starting on or after 1 April.
R&D Claims pre-notification – When to submit pre-notification?
Effective for accounting periods beginning on or after 1 April 2023, the notification form must be submitted within six months after the end of the relevant accounting period. For example, if a business’s accounting period runs from 1 January 2024, to 31 December 2024, the notification deadline is 30 June 2025. Missing the deadline invalidates the claim.
R&D Claims – How to submit pre-notification?
Pre-notification is done through HMRC’s online portal. The information required includes:
- Company’s unique tax reference (UTR)
- Details of the senior officer responsible for the claim
- R&D agent’s details (if applicable)
- Accounting period dates
- A summary of planned R&D activities (less than 10,000 characters)
Other important considerations
If the accounting period changes, the notification deadline remains six months from the end date of the period. Early discussions on R&D activities are recommended to avoid missing the deadline, as late submissions result in the claim being automatically withdrawn.
RPGCC – We are here to help
R&D is a complex area of tax and one that HMRC are actively looking at, it is not an area off tax that should be entered into without professional advice. For guidance on R&D pre-notification or eligibility for R&D tax credits, please contact our Corporate Tax Team on 020 7870 9050.
