The ins and outs of pre-notification of R&D claims

The ins and outs of pre-notification of R&D claims

The UK Government has long encouraged businesses to invest in Research & Development (R&D) projects, believing it to be at the forefront of economic growth.

R&D tax reliefs are, therefore, lucrative and aimed at both Small and Medium Sized Enterprises (SMEs) and larger organisations.

However, before organisations plan to claim R&D tax relief or expenditure credit, they must now notify HM Revenue & Customs (HMRC) of their plans to do so.

HMRC reforms to R&D pre-notification claims came about in April 2023 in an attempt to crack down on abuse of the R&D tax relief scheme.

Who should notify HMRC?

Companies who are planning to claim R&D tax relief must now notify HMRC if they:

Notification deadlines

The deadline for submitting claim notification forms is six months after the end of the period of account that the claim relates to.

Any submission after this deadline will not be valid.

What information will you need to complete the claim notification form?

The claim notification form requires thorough checking before being submitted as any missing details could lead to claims being rejected outright.

All claim notification forms need the following details:

Once a claim notification form has been submitted online, an email will be sent which will contain a reference number that will need to be kept on record to discuss the claim notification form with HMRC.

Submitting the claim notification form allows organisations to continue with their claim, they will just need to put an ‘X’ in box 656 of the Company Tax Return to inform HMRC that the claim notification form has been submitted.

From 1 August 2023, an additional information form must be submitted to support all claims for R&D tax relief. This form will allow you to explain in detail about your project to evidence its R&D properties.

This additional information form needs to be submitted or else HMRC will not be able to process your claim.

For more information about the R&D relief changes and what to include on your notification forms, please contact us for expert advice.

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