One of the many recent changes to R&D tax relief is the requirement for companies who are new to the relief to submit a claim notification in advance. The deadline for submitting this notification is fast approaching for the first 12-month accounting periods affected, and failure to take action could result in companies missing out on relief they are otherwise entitled to.
What is claim notification?
A claim notification is required for accounting periods beginning on or after 1 April 2023 where a company:
is claiming R&D relief for the first time; or
hasn’t made a claim in the last three years (see below).
It applies to claims under both the old SME and RDEC schemes, and the new merged scheme which came into effect from 1 April 2024.
The deadline for submitting a claim notification is six months from the end of the relevant period of account. For the year ended 31 March 2024 (the first 12-month accounting period to be affected), the deadline is therefore 30 September 2024.
Failure to file a claim notification form where required will result in any future R&D claim for that period being invalid. If any such claim is then submitted, HMRC will remove it from the return.
The three-year look back
As noted above, a company doesn’t have to submit a claim notification if they have made an R&D claim in the last three years.
The relevant three-year period is that ending on the claim notification deadline: we need to look back three years from this deadline and see if a claim was made in that period.
For example, as noted above, a company with an accounting period ending on 31 March 2024 will have a claim notification deadline of 30 September 2024. If an R&D claim was submitted by that company at any time in the period from 1 October 2021 to 30 September 2024, no claim notification will be required.
An important point to note is that it is the date a claim was actually made – not the accounting period to which it related – which is important.
We also only look backwards from the claim notification deadline, and cannot take into account any claims submitted after it, even where these are in respect of earlier periods. As a result, earlier year amendments made late in the day might not be taken into account.
For example, for the year ended 31 March 2024, only claims made before the claim notification deadline of 30 September 2024 will be taken into account. If the return for the period ended 31 March 2023 is amended at any time in the period from 1 October 2024 to 31 March 2025 to include an R&D relief claim for the first time, that claim will fall outside the three year look-back window. As a result, a claim notification will still be needed for the 31 March 2024 claim to be valid – even though a claim has subsequently been made for an earlier year.
Practicalities
Claim notifications need to be made online using HMRC’s dedicated form (available on Gov.uk).
The information required ranges from basics such as the UTR and accounting period through to a high level summary of the activities in question, sufficient to demonstrate they meet the definition of R&D. The main senior internal R&D contact in the claimant company, and any agent involved in the claim, also need to be named.
The form can be completed by the claimant themselves, their corporation tax filing agent or R&D adviser. It’s important that all parties involved in preparing and filing a claim agree who will be responsible for submission.
Agents being asked to file returns containing R&D tax relief claims should check that a claim notification form has been submitted where they believe one is required. They will then need to confirm this by ticking box 656 on the CT600. An Additional Information Form (AIF) will also need to be submitted before any claim is made. Although the claim notification form asks some of the same questions, it does not capture the same level of detail as the AIF, and completion of one form does not remove the requirement for the other.
Given the serious consequences of failing to submit a claim notification by the six-month deadline, steps should be taken as soon as possible to identify any clients likely to require one. Going forward, those taking on new corporate clients also need to explore the possibility of claiming R&D tax relief earlier than they may have in the past – it will no longer be possible to wait until the first accounts are finalised.
One of the many recent changes to R&D tax relief is the requirement for companies who are new to the relief to submit a claim notification in advance. The deadline for submitting this notification is fast approaching for the first 12-month accounting periods affected, and failure to take action could result in companies missing out on relief they are otherwise entitled to.
What is claim notification?
A claim notification is required for accounting periods beginning on or after 1 April 2023 where a company:
is claiming R&D relief for the first time; or
hasn’t made a claim in the last three years (see below).
It applies to claims under both the old SME and RDEC schemes, and the new merged scheme which came into effect from 1 April 2024.
The deadline for submitting a claim notification is six months from the end of the relevant period of account. For the year ended 31 March 2024 (the first 12-month accounting period to be affected), the deadline is therefore 30 September 2024.
Failure to file a claim notification form where required will result in any future R&D claim for that period being invalid. If any such claim is then submitted, HMRC will remove it from the return.
The three-year look back
As noted above, a company doesn’t have to submit a claim notification if they have made an R&D claim in the last three years.
The relevant three-year period is that ending on the claim notification deadline: we need to look back three years from this deadline and see if a claim was made in that period.
For example, as noted above, a company with an accounting period ending on 31 March 2024 will have a claim notification deadline of 30 September 2024. If an R&D claim was submitted by that company at any time in the period from 1 October 2021 to 30 September 2024, no claim notification will be required.
An important point to note is that it is the date a claim was actually made – not the accounting period to which it related – which is important.
We also only look backwards from the claim notification deadline, and cannot take into account any claims submitted after it, even where these are in respect of earlier periods. As a result, earlier year amendments made late in the day might not be taken into account.
For example, for the year ended 31 March 2024, only claims made before the claim notification deadline of 30 September 2024 will be taken into account. If the return for the period ended 31 March 2023 is amended at any time in the period from 1 October 2024 to 31 March 2025 to include an R&D relief claim for the first time, that claim will fall outside the three year look-back window. As a result, a claim notification will still be needed for the 31 March 2024 claim to be valid – even though a claim has subsequently been made for an earlier year.
Practicalities
Claim notifications need to be made online using HMRC’s dedicated form (available on Gov.uk).
The information required ranges from basics such as the UTR and accounting period through to a high level summary of the activities in question, sufficient to demonstrate they meet the definition of R&D. The main senior internal R&D contact in the claimant company, and any agent involved in the claim, also need to be named.
The form can be completed by the claimant themselves, their corporation tax filing agent or R&D adviser. It’s important that all parties involved in preparing and filing a claim agree who will be responsible for submission.
Agents being asked to file returns containing R&D tax relief claims should check that a claim notification form has been submitted where they believe one is required. They will then need to confirm this by ticking box 656 on the CT600. An Additional Information Form (AIF) will also need to be submitted before any claim is made. Although the claim notification form asks some of the same questions, it does not capture the same level of detail as the AIF, and completion of one form does not remove the requirement for the other.
Given the serious consequences of failing to submit a claim notification by the six-month deadline, steps should be taken as soon as possible to identify any clients likely to require one. Going forward, those taking on new corporate clients also need to explore the possibility of claiming R&D tax relief earlier than they may have in the past – it will no longer be possible to wait until the first accounts are finalised.
