Forthcoming changes to Research and Development Claims

Recent changes to R&D guidance may restrict cash refunds if the company uses mainly sub-contractors and pay limited PAYE/NIC, but the claim itself is not restricted where not exchanged for a repayable tax credit and will still be worth making in the vast majority of cases.


A number of additional changes are being introduced on 1 April 2023, which includes limiting sub-contractor and externally provided worker costs to UK activity, amongst others. This means that companies utilising non-UK based subcontractors may find their potential R&D claims from April 2023 reduced.


The most significant change is that for accounting periods which begin on or after 1 April 2023, HMRC will need to be notified within 6 months following the period end that the Company intends to submit an R&D claim. However, as accounts are not required to be submitted until 9 months after the year end, if the company is submitting a claim for the first year and is not prompt in the preparation of their accounts, they may not be aware they will be submitting a claim until the deadline has passed.


On current claims we are still experiencing delays on R&D claims and repayments – we understand that it should now be 40 days rather than 28, but unfortunately we are still chasing for earlier claims still not processed within these timescales. Where there are delays, these are always regularly followed up with HMRC.

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