Ian Davie
Senior Consultant
In April 2023, HMRC introduced a pre-notification process for R&D tax relief claims. This new requirement means that if a company has not made an R&D claim in any of the previous three years, they must notify HMRC in advance if they intend to submit a claim.
There is a limited window to do this for accounting periods starting after 1st April 2023. The window in which a pre-notification can be completed as the following example:
This means that as of now, any company with an accounting period ending in March 2024 that did not submit a pre-notification can no longer claim R&D tax relief for that year.
I’ve spoken to several businesses recently that have been caught out by this rule, and the consequences are frustrating.
A company has carried out significant R&D over the past two years but never claimed before.
A business received substantial R&D grant funding from NIHR, Innovate UK (IUK), and SBRI since 2022 but had never claimed R&D tax relief.
The Pre-Notification requirement appears to be an unnecessary barrier that restricts access to legitimate R&D tax relief. The R&D schemes are supposed to support innovation, yet businesses are being penalised not because their work isn’t R&D, but simply because they didn’t complete an administrative step in time.
Companies that genuinely deserve tax relief are losing out, not because of fraud, not because they don’t meet the criteria, but because of an admin exercise!
If you’re even considering an R&D tax relief claim, we urge you to submit the pre-notification. It takes just 30 minutes to complete and could save you thousands in lost claims.
If you need guidance or have any questions about the pre-notification process, feel free to get in touch with the TBAT team or book an appointment with me today!
Check out these questions from our Knowledge Centre:
Claiming R&D tax relief is a valuable way to recover costs from innovation projects, but it’s not always straightforward. From misunderstanding HMRC’s definition of R&D to weak record-keeping and inaccurate claims, there are challenges that can turn a straightforward application into a drawn-out enquiry. In this article, we explore the most common risks businesses face when claiming R&D tax and share practical steps to strengthen your claim.
Third-party technology, including software and license fees, is often overlooked when businesses prepare R&D tax relief claims, yet these costs can be eligible if directly linked to innovation activities. This article breaks down how companies can identify and justify these expenses in line with HMRC guidance.
Assists organisations in accessing research and development grant funding across a range of UK and EU schemes and industry sectors.
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