Everyone planning to claim R&D Tax Credits for the first time needs to know about HMRC’s requirement for pre-claim notifications. It’s equally important for those who haven’t made a claim in the last three years.
We can’t stress this enough — if you miss your pre-claim notification deadline, you might lose out on the chance to benefit from a substantial amount of financial relief from the government.
The need to submit a pre-claim notification was introduced to stop the abuse of R&D tax relief. Unfortunately, the downside of this is that the strict rules can also penalise genuine companies making R&D claims. So, it’s important not to get caught out! In this article, we explain why certain businesses need to make a pre-claim notification to HMRC before submitting their R&D Tax Credits claim
What is the pre-claim notification?
Businesses planning to claim R&D tax relief for accounting periods beginning on or after 1 April 2023, must submit a claim notification to HMRC if they are either claiming R&D Tax Credits for the first time or if they haven’t claimed in their last three accounting periods.
This applies to all of the current R&D tax relief schemes, including: the R&D Expenditure Credit (RDEC), the SME R&D scheme, the merged R&D scheme, and enhanced R&D intensive support (ERIS). For those who have made an R&D tax relief claim in the last three accounting periods, please note that if your claim was rejected by HMRC, or if you have submitted a claim for an accounting period beginning before 1 April 2023 by amending your company tax return, and the amendment was made on or after 1 April 2023, you will still need to pre-notify.
What is the claim notification period?
You must submit your notification within six months of the end of the accounting period that you plan on claiming for — this is known as your ‘claim notification period’. For example, if your accounting period covers 1 April 2024 to 31 March 2025 the last day you can make a pre-claim notification will be 30 September 2025.
Unfortunately, as this date isn’t aligned with other tax deadlines it’s quite easy to completely forget about. But if you don’t apply in time, you’ll miss out on being able to claim your R&D tax relief even if you’re eligible!
What if we don’t know if our innovative projects are eligible for R&D relief?
Businesses have to make a fast judgement on if their research and development activity is eligible for R&D tax relief. Eligible R&D projects improve existing products, processes, or services, or create new ones. To claim successfully, you will need to demonstrate how your R&D activity:
- looked for a scientific or technical advancement
- overcame a scientific or technical uncertainty (i.e., your solution can’t easily be deduced by a competent professional)
- used a systematic approach
Many businesses hold off on applying for R&D Tax Credits because they’re not sure if they’re eligible to claim. This is a risky strategy, as if you wait for too long you could miss out on being able to claim.
If you’re not sure if you can make a claim, we’d still recommend that you send HMRC a claim notification. There’s no penalty for changing your mind, so you’ve got nothing to lose.
What do we need for making a pre-claim notification?
To complete your pre-claim notification for R&D relief, you’ll need:
- your company’s Unique Taxpayer Reference (UTR)
- the accounting period dates for which you are claiming the R&D relief (matching your Company Tax Return)
- the period of account dates
- details for the main R&D contact responsible for the R&D claim (e.g., a company director)
- details for any external agents involved in the R&D claim
- top-level descriptions of qualifying R&D projects and activities
Pre-claim notifications can be submitted by either a representative of your company or an agent acting on your company’s behalf. This means that if you’re already a client of Leyton UK, we’ll be on top of your pre-claim notification.
How Leyton can help
At Leyton UK, we simplify access to complex financial incentives, allowing your business to unlock the full savings available through claiming R&D tax relief.
Not only do we have highly qualified tax experts, our technical consultants have field experience across a wide range of software, science and engineering
industries. This uniquely allows us to understand and identify all the areas where you can claim R&D Tax Credits. So, if you’re not sure if your project is eligible for relief, we can help.
We can also advise your business on whether you need to file a pre-claim notification, as well as help you with your submission.
Remember, it’s vital that you don’t wait too long before submitting your claim notification! If you miss your company’s deadline, you could lose out on a substantial tax benefit. Make sure that you speak to a specialist today.
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