Advance Notification of R and D Claims
R and D claims have evolved in recent years, with HMRC implementing updates to the claim process. Let’s discuss these revisions which HMRC have introduced into the R and D Claim Process and the reasons behind HMRC’s adjustments.
In an attempt to tackle the growing number of fraudulent R&D claims, HMRC has introduced several new measures aimed at increasing oversight and ensuring that only legitimate claims receive R and D tax relief. One of the most significant changes is the requirement for companies to notify HMRC in advance before submitting an R&D claim. This additional step allows HMRC to assess the validity of potential claims earlier in the process, reducing the risk of fraudulent or ineligible submissions slipping through.
Failure to comply with this requirement can have serious consequences. If a company submits an R&D claim without first providing the necessary notification, HMRC has the authority to amend the company’s tax return and remove the claim entirely. Unlike other tax adjustments, this amendment is final and cannot be appealed or rejected by the company. Additionally, once HMRC has removed the claim, the company is prohibited from resubmitting a new claim for the same expenditure, meaning that missing the notification deadline could result in a permanent loss of potential tax relief.
These stricter regulations emphasise the importance of businesses staying informed and being proactive when it comes to R&D tax relief claims. Companies must ensure they understand the updated process, meet all deadlines, and provide the required information to avoid the risk of their claims being disqualified.
Who Must Notify HMRC
Any company wishing to submit an R&D claim for an accounting period beginning on, or after 1 April 2023 must notify HMRC in advance of submitting their claim if:
- This is the company’s first claim.
- A claim was submitted for the previous year but was submitted after the last day of the notification period (6 months after the end of the period of account).
- The last claim was more than 3 years before the last date of the claim notification period.
This applies to claims made under either the SME or RDEC schemes.
When To Notify HMRC About An R and D Claim
The latest that a notification can be made is 6 months after the end of the period of account the claim relates to. For a year that runs from 1 January 2024 to 31 December 2024 the latest a notification can be made is 30 June 2025. It is possible to notify HMRC from 1 January 2024.
For long periods, those over 12 months, only one notification must be made. For a long period running from 1 January 2024 to 31 March 2025 there are 2 accounting periods, 1 January 2024 to 31 December 2024 and 1 January 2025 to 31 March 2025. However only one notification needs to be made, no later than 30 September 2025.
What Information is Required
The notification must include the following:
- The company’s Unique Tax Reference (UTR) number
- The individual within the company who is responsible for the R and D claim.
- Contact details for any agent involved with the R and D claim.
- The accounting period which the claim will be made for
- A high-level summary of the planned activities for which the claim will be made for.
How to Submit your R and D Claim Notification form to HMRC
The notification can be made by the company or their agent. The notification must be submitted through the company’s or agent’s HMRC account.
Here’s how:
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Sign in using your Government Gateway user ID and password (or create an account if you don’t have one).
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Alternatively, use your email address to receive a confirmation code for signing in.
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Save a copy of the completed form before submission, as you won’t be able to access it afterward.
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Submit the form before the end of your claim notification period.
Once submitted you will be provided with a reference number which should be retained.
The CT600 has been updated to include box 656, which must be completed to indicate a claim notification form has been submitted.
If you are unsure if you need to submit a claim notification form please contact us on 028 9040 6295 or e-mail rb@pgradvisory.com.