R&D claim notification: what you need to know
As part of ongoing efforts to reduce errors and fraud, HMRC has introduced a claim notification requirement for R&D tax relief claims. Failure to submit the advance notification in time (within 6 months from the end of the accounting period) will result in the company losing the ability to claim R&D tax relief for the accounting period.
First time claimers for R&D relief, with an accounting period beginning on or after 1 April 2023 must submit the notification to HMRC within 6 months from the end of the accounting period. Failure to do so will result in the R&D claim being refused. Therefore, a company with a year end of 31 March 2024 must make a notification by 30 September 2024.
The change reflects the government’s belief that genuine research and development activities will have been planned in advance. Here’s everything you need to know about who needs to notify HMRC, when to notify, and what to include in the claim notification form.
Do I need to notify HMRC about my R&D claim?
For R&D tax claims relating to accounting periods starting on or after 1 April 2023, the company must notify HMRC if it is:
- Claiming for the first time, or
- The last claim was submitted more than three years before the end of the claim notification period, or
- A claim has been made in the last three years, but it doesn’t meet certain criteria (details below).
Failure to submit the advance notification in time will result in the company losing the ability to claim R&D tax relief for that period altogether.
What is R&D claim notification?
R&D claim notification involves notifying HMRC of the company’s intention to apply for R&D tax relief. This is mandatory for first-time claimants and those who haven’t claimed in the past three years (further details below). Eligible businesses must submit a claim notification form to HMRC within 6 months from the end of the accounting period to make an R&D claim.
This requirement is part of several measures introduced to reduce fraud in R&D tax claims.
3 year exemption
If the company is claiming R&D tax relief for the first time and the accounting period begins on or after 1 April 2023, the company must submit a claim notification form.
For those who have claimed before, check if the previous claim was submitted within a 3 year window. Calculate this by identifying the last day of the claim notification period (six months after the accounting period ends) and counting back three years. If the previous claim falls within this window, the company may not need to notify HMRC. However, be aware of any transitional provisions concerning how the claim was originally submitted.
When should I notify HMRC?
If the company intends to claim for an accounting period beginning on or after 1 April 2023, and needs to notify HMRC, it must do so within six months following the end of that accounting period. For example, if the accounting period ends on 31 March 2024, the company would need to notify HMRC by 30 September 2024.
What information is required for the claim notification?
You will require the following to complete the claim notification form:
- The company’s Unique Taxpayer Reference (UTR), which must match the one shown in the company Tax Return
- The main senior internal R&D contact in the company who is responsible for the R&D claim, for example a company director
- Contact details of any agent involved in the R&D claim
- The accounting period start and end date for which the company is claiming the tax relief or expenditure credit, this must match the one shown in the company Tax Return
- The period of account start and end date
- A summary of the high-level planned activities
Claim notifications can be submitted by a representative of the company or an agent acting on the company’s behalf. You will need to submit the claim notification form online using a Government Gateway user ID or an email address.
Once submitted, HMRC will send an email containing a reference number which the company will need to keep for their records.
How do I claim the R&D tax relief?
If the company decides to proceed with a claim, the company will need to mark box 656 of the company Tax Return with an ‘X’ to indicate that a claim notification form has been submitted.
When making a claim, you must also submit an additional information form.
Can I still claim R&D tax relief without submitting a claim notification form?
If the company was obligated to notify HMRC but did not submit the form, the company will be ineligible to claim R&D tax relief for that period. Unless your company meets the criteria for the 3 year exemption, the claim will be excluded from the company Tax Return, and the relief will be refused, even if the R&D activities would otherwise qualify.
For further guidance or support with your R&D claim, feel free to reach out to our team of tax experts at Carpenter Box.
