The UK’s Research and Development (R&D) tax relief scheme incentivises innovation by allowing companies to reclaim costs associated with qualifying R&D activities. However, recent reforms, effective for accounting periods beginning on or after 1 April 2023 have introduced a critical procedural step: the Research and Development Claim Notification Form.
This mandatory form ensures businesses notify HMRC of their intent to claim R&D tax relief or expenditure credits within strict deadlines. Failure to comply invalidates claims, potentially resulting in significant financial losses. This guide explores eligibility criteria, deadlines, submission processes, and compliance strategies to support businesses and advisors navigating these new requirements.
Understanding the Research and Development Claim Notification Requirement
Who Must Submit the Form?
Companies seeking to claim R&D tax relief, expenditure credits or merged R&D scheme must submit the Claim Notification Form under these circumstances:
- First-Time Claimants: Businesses making their initial R&D tax relief claim.
- Lapsed Claimants: Companies whose most recent claim was made more than three years before the current claim notification period deadline. (i.e. 6 months after period of account date)
Exceptions if Claimed Previously:
If you’ve claimed R&D tax relief within 3 years of the last date of your claim notification period you do not need to send a claim notification form, unless any of the following exceptions apply:
- Companies with claims previously rejected by HMRC (removed from a Company Tax Return).
- Claimed R&D tax relief for an accounting period beginning before 1 April 2023 by amending your tax return and the amendment was received on or after 1 April 2023.
Agents or company representatives, such as directors, may submit the form. Collaboration with expert advisors is crucial to ensure alignment with HMRC’s technical and financial standards.
Calculating the Research and Development Claim Notification Period
Key Definitions
Companies seeking R&D tax relief or expenditure credits must submit the Claim Notification Form under these circumstances:
- Period of Account: The timeframe covered by financial statements (may exceed 12 months).
- Accounting Period: The timeframe covered by a Company Tax Return (max 12 months).
The claim notification period spans from the first day of the period of account to six months after its end. For example:
- A 12-month accounting period (1 Jan 2024 – 31 Dec 2024) has a notification deadline of 30 June 2025.
- An 18-month period of account (1 Jan 2024 – 30 Jun 2025) has a deadline of 31 Dec 2025.
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Submission Process and Information Required
Step-by-Step Submission
01. Gather Documentation:
- Company UTR (matching the Corporation Tax Return).
- Senior R&D contact details (e.g. director).
- Agent/advisory firm contact information.
- Accounting and period of account dates.
- The number of R&D project(s), and
- An overview of the R&D project(s) for the period of account.
02. Online Submission:
- Access HMRC’s portal via Government Gateway or email confirmation code.
- Save a copy pre-submission, as post-submission access is restricted.
03. Confirmation:
- HMRC emails a reference number for future correspondence.
Post-Submission Steps
- Proceed with Claim: Calculate relief using enhanced expenditure rates or expenditure credits.
- Abandon Claim: No further action required if withdrawing.
Strategic Considerations for Businesses
Avoiding Pitfalls
- Missed Deadlines: Late submissions invalidate claims, hence automated reminders and advisor oversight mitigate this risk.
- Incomplete Descriptions: Vague project summaries risk HMRC challenges. Instead try being as specific as possible focusing on the compliant nature of activities rather than the features and benefits of the end solution.
- Agent Coordination: Ensure all advisors (financial, technical) are listed to prevent compliance gaps.
Role of Accountants and Advisors
Pre-Claim Preparation - Advisors play a crucial role by:
- Verifying the accuracy of the company’s UTR, project descriptions, and expenditure classifications.
- Mapping timelines clearly to ensure notification deadlines align with accounting cycles.
- Checking the claim history over the previous three years to determine the necessity of the notification form.
Conclusion
The Research and Development Claim Notification Form signifies HMRC’s increased focus on compliance and accountability. Businesses must view this as an essential step, integrating it into their annual tax planning strategies. Advisors should prioritise client education, ensuring deadlines and documentation are managed proactively to avoid costly oversights.
Detailed Guidance from HMRC can be found here: Tell HMRC you want to claim Research and Development (R&D) tax relief – GOV.UK