R&D notification form is new hurdle for claimantsby
Companies new to research and development relief, or who haven’t claimed recently, must let HMRC know that they intend to claim. Emma Rawson takes a closer look at what this involves and why it’s so important that it isn’t missed.
Companies wanting to submit a research and development (R&D) relief claim for the first time for accounting periods beginning on or after 1 April 2023, or who haven’t claimed in the past three years, will need to submit a claim notification form to HMRC first.
This new requirement is part of a package of measures announced at the Autumn Statement 2021 to target abuse and improve compliance in the R&D regime. That package also included the additional information form (AIF), which became compulsory in August.
The claim notification form has a relatively tight deadline and, unlike the AIF, those who fail to complete it are unlikely to get a second bite at the cherry.
So what is it, who is affected and what might happen if it is missed?
Who needs to file a claim notification form?
The claim notification form applies to claims under both the small or medium-sized enterprise (SME) and R&D expenditure credit (RDEC) schemes. It is required for accounting periods beginning on or after 1 April 2023 if:
- the company is claiming R&D relief for the first time, or
- they haven’t made a claim in the past three years (see below for more on this).
However, a company won’t need to submit a claim notification form if it can submit the claim itself before the claim notification form deadline.
What’s the deadline?
A claim notification can be submitted at any time from the first day of the relevant accounting period up to six months from the end of the period of account.
For example, a company drawing accounts up for the year ended 31 December 2024 will have from 1 January 2024 to 30 June 2025 to submit their claim notification form.
If a company has a long period of account (the accounts cover more than 12 months), this normally is split into two accounting periods for corporation tax purposes. However, only a single claim notification form needs to be submitted, to cover the first accounting period for which a claim will be made. There is no need to submit a separate claim notification form for any later accounting periods in the same period of account. In all cases, the deadline will be based on the end of the period of account. For example, for an 18-month period of account running from 1 January 2024 to 30 June 2025, a single form can be submitted any time between 1 January 2024 and 31 December 2025.
The three-year look-back
As outlined above, a company won’t have to submit a claim notification form if they have made an R&D claim in the past three years.
The exact period for this three-year look-back depends on the claim notification deadline for the relevant accounting period. Effectively, the company will need to look back three years from this deadline and see if a claim was made in that period.
For example, for the accounting period ending 31 December 2024, the claim notification deadline will be 30 June 2025. If an R&D claim was submitted by the company at any time in the period from 1 July 2022 to 30 June 2025, the company will be exempt from submitting a claim notification form.
The key point here is the need to look at the date any claim was actually made – not the accounting period it covered. In particular, earlier year amendments that are made late in the day might miss this window.
For example, for the year ended 31 December 2024, the claim notification deadline will be 30 June 2025. If the return for the period ended 31 December 2023 is amended at any time in the period from 1 July to 31 December 2025 to include an R&D relief claim for the first time, that claim will fall outside the three-year look-back window. As a result, a claim notification form will still be needed for the 31 December 2024 claim to be valid – even though a claim was made for the year before.
How does notification work?
Claim notifications have to be submitted using a dedicated online form.
This can be completed by the claimant themselves, or an agent. HMRC’s guidance lists out the information that is needed, which includes basic information such as the unique taxpayer reference (UTR), accounting period and so on. The main senior internal R&D contact in the company, and any agent involved in the claim, also need to be named. A high-level summary of the activities in question should be provided, sufficient to demonstrate that they meet the definition of R&D.
When it comes time to make the R&D claim itself, it’s important to tick box 656 on the CT600 to confirm the claim notification form has been submitted. An AIF will also need to be completed before the claim goes in.
What happens if a claim notification isn’t made?
If a claim notification is required, failure to submit by the relevant deadline will mean any subsequent R&D claim for that period is invalid. If a corporation tax return is submitted including a claim anyway, HMRC will simply remove it from the return.
Unlike the AIF, the short deadline for submitting a claim notification form means it’s highly unlikely companies in this situation will be able to remedy it by submitting the claim notification form and then an amended return to reinstate the claim. This would effectively require the initial claim to have been submitted (and removed) within six months of the accounting period end.
The claim notification form only takes effect for accounting periods beginning on or after 1 April 2023, so many companies may not actually need to submit one for some time. However, given the short six-month deadline, and the potentially dire consequences of missing it, agents should take steps now to identify who might need to submit and when. This will be particularly important for short accounting periods, whose notification deadline may already be fast approaching.
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Emma a technical officer with the Association of Tax Technicians (ATT). Her background is in corporation tax and she also has a focus on VAT.
She trained with Deloitte, working in both their London and Leeds offices, and also spent a short time working in a specialist consultancy firm providing advice to other practitioners before joining...