Research and Development (R&D) tax relief is a valuable incentive provided by the UK government to encourage innovation and technological advancement. Companies engaged in qualifying R&D activities can claim tax relief, but specific rules regarding pre-notification, which come into effect on 1 April 2023, must be adhered to.
Pre-notification refers to the requirement for UK companies to inform HM Revenue & Customs (HMRC) about their intention to claim R&D tax relief. It involves notifying HMRC before submitting the actual claim. The purpose of pre-notification is to ensure transparency, prevent last-minute speculative claims, and allow HMRC to assess the eligibility of the R&D activities.
When it comes to notifying HMRC about R&D projects in the UK, there are specific guidelines you should follow:
1. Pre-notification requirement
- Timing: If you’re planning to claim R&D tax relief for accounting periods beginning on or after 1 April 2023, you must submit a claim notification form within six months of the period-end for which you intend to claim.
- Who: Companies claiming for the first time or whose last claim was made more than three years before the last date of the claim notification period must comply.
- Consecutive accounting periods: If a previous claim was submitted within the last six months of the Company Tax Return amendment window, you may need to submit the claim notification form for two consecutive accounting periods.
2. What to include in the claim notification form:
- Company details (unique taxpayer identification - UTR)
- Main internal R&D contact person
- Agent details (if applicable)
- Start and end dates of the accounting period
- Summary of crucial planned R&D projects aligned with the standard definition of R&D.
Complying with pre-notification rules ensures a smooth R&D tax relief process!
Conclusion
Pre-notification is a crucial step in claiming R&D tax relief in the UK. Companies should be aware of the deadlines and provide accurate information during this phase. By adhering to pre-notification rules, businesses can maximise their chances of successfully claiming R&D tax relief.
The next step
If you want to discuss your potential eligibility to make an R&D claim or any of the above in more detail, please get in touch with Susan Parker at s.parker@uhy-manchester.com or Nick Donohue at n.donohue@uhy-manchester.com.
