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

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

Because the R&D reliefs are so lucrative, they have been subject to substantial perceived abuse in recent years.

HM Revenue & Customs (HMRC) introduced reforms in April 2023 in an attempt to cut down on this abuse, one of which is the requirement for organizations to notify HMRC of an intended R&D claim before they actually made the claim.

These new pre-notification requirements apply to all accounting periods commencing on or after 1 April 2023.

Who should notify HMRC?

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

• Are claiming for the first time.

• Have claimed for the previous tax year but did not submit that claim until after the last date of the claim notification period (the claim notification period ends six months after the end of the period of account).
• Have a claim that was made more than three years before the last date of the claim notification period.

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.

So, a company with a 31 March 2024 year-end would have until 30 September 2024 to notify HMRC of its intention to make an R&D claim.

If that company had made a previous R&D claim, and that claim had been submitted on or after 1 October 2021, they would not have to pre-notify.

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:

• The company’s Unique Taxpayer Reference (UTR)
• The name of the senior R&D contact in the company who is responsible for the claim
• Contact details of any agent involved
• The accounting period start and end date for which you’re claiming the tax relief
• The period of account start and end date
• A summary of the high-level planned activities and evidence the project meets the standard definition of R&D.

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.