Adapting to the pre-notification process for R&D claims

Research and Development (R&D) has been deemed instrumental in fuelling economic growth by the UK Government, resulting in generous R&D tax reliefs for both Small and Medium Sized Enterprises (SMEs) and larger organisations.

However, given their lucrative nature, R&D reliefs have witnessed extensive misuse in the past years.

To counteract this, HM Revenue & Customs (HMRC) introduced new regulations in April 2023, including a pre-notification requirement for organisations intending to file an R&D claim.

This requirement applies to all accounting periods starting on or after 1 April 2023.

Who needs to notify HMRC?

Organisations planning to claim R&D tax relief are obligated to notify HMRC under the following conditions:

• Submitting an R&D claim for the first time.
• They claimed R&D tax relief for the previous tax year but did not file the claim until after the claim notification period ended (six months after the end of the period of account).
• Their claim was made over three years before the end of the claim notification period.

Pre-notification deadlines

Claims must be pre-notified within six months following the end of the period of account relating to the claim. Late submissions will not be considered valid.

Therefore, a company ending its financial year on 31 March 2024 would need to notify HMRC of its R&D claim by 30 September 2024.

Previous R&D claimants, who submitted their claim on or after 1 October 2021, are exempt from this pre-notification.

Key information for the claim notification form

A meticulous approach is crucial while filling out the claim notification form as incomplete submissions may result in claim rejection. The form must include:

• The company’s Unique Taxpayer Reference (UTR).
• Name and contact details of the senior R&D representative responsible for the claim, as well as any involved agent.
• Both the start and end date for the accounting period of the claim and the period of account.
• A summary of planned high-level activities and proof that the project meets the standard R&D definition.

After submitting the online claim notification form, an email containing a reference number will be sent. This number must be retained for future correspondence with HMRC about the claim.

To proceed with the claim, check box 656 of the Company Tax Return, indicating that the claim notification form has been submitted.

From 1 August 2023, all R&D tax relief claims must be accompanied by an additional information form detailing your project to support its R&D claims. Failing to submit this form will result in your claim not being processed by HMRC.

For expert advice and further information about the changes in R&D relief and the details required for notification forms, feel free to speak to us.