HMRC have now introduced a claim notification form. This notification must be submitted in advance of Research and Development Tax Relief Claims. For accounting periods beginning on, or after 1 April 2023, a claim notification form may need to be submitted to HMRC before a Research and Development Tax Relief claim can be made. For normal 12 month accounting periods, the first year end for which a claim notification is required would be 31 March 2024.
Who Needs to Submit A Research and Development Tax Relief Claim:
·You are claiming Research and Development tax relief for the first time OR
·The last claim was made more than 3 years before the last day of the claim notification period.
Claim Notification Period For Research and Development Tax Relief
The claim notification period begins on the first day of the accounting period and ends 6 months after the last day of the accounting period.
For a standard 12 month accounting period ending on 31 December 2024 the notification period is 1 January 2024 to 30 June 2025.
For a long period of account running from 1 January 2024 to 31 March 2025 the claim notification period is 1 January 2024 to 30 September 2025. Only one claim notification is required for a long period.
3 Year Exemption
The 3 year period ends on the last day of the notification period and begins 3 years before that. For a 12 month period ending 31 March 2026 the 3 year period runs from 1 October 2023 to 30 September 2026.If no R&D claim has been submitted in that period, a claim notification must be submitted to HMRC.
Claims made for periods beginning before 1 April 2023 which were included on an amended return filed after 1 April 2023 do not count for the purposes of determining if a claim has been made within the 3 year window.
How to Notify HMRC About a Research and Development Tax Relief Claim
The notification is submitted online, using the same login details as for the AIF (Advanced Information Form). The notification form will include the following information:
·Company UTR
·Contact details for the senior R&D contact within the company
·Agent contact details
·Accounting period
· A high level summary of the planned R&D activities, in sufficient detail to show they meet the definition of R&D
Who Can Notify HMRC About a Research and Development Tax Relief Claim
·A representative of the company
·The company’s agent (it does not specify the need to have a 64-8 in place).
Why Have HMRC Introduced The Advance Notification Form?
This is part of HMRC’s overhaul of the Research and Development Tax Relief Scheme, which is geared towards preventing fraudulent claims.
How Can I Ensure That The Advance Notification Form Is Completed Correctly?
Information required in the advance notification form includes a summary of the planned R&D activities. Although it should be a summary, it is essential to submit enough detail to show that any projects meet the definition of R&D. This means that companies will have to be more forward thinking in their approach to their Research and Development.
What Happens if a Claim Notification is not Submitted On Time?
If a claim notification should have been submitted, but was not, HMRC will remove the R&D claim from the tax return. Given the deadlines for claim notification it may not be possible to re-submit and the ability to make a claim for that year will be lost.
What Is HMRC’s Definition of What Qualifies As Research and Development?
·Projects that are looking for an advance in the scientific or technical field that you are working in.
·Projects that have had to overcome a scientific or technological uncertainty and how they have tried to do this.
·Projects that could not easily be worked out by a professional within this field.
This applies to research for projects in which a new product, service or process is being developed or improvements on an existing product, service or process is being developed.
At PGR Advisory, we have a team of qualified regulated accountants who can guide you through the complete process from Advance Notification to claim. Our team of engineers with expert experience in Research and Development over various industries, can understand the technical aspects of your projects and help you to ascertain what qualifies as R&D. Additionally our team of prior HMRC inspectors can assist you with compliance. Our collective experience and collaborative approach, means you can rest assured your R&D Tax Relief Claim is in the best hands. If you have submitted a valid claim independently or through another advisor and have received an enquiry notice from HMRC, get in touch, our Tax Experts can help you. We cover and provide service throughout the whole of the UK.