What does Advance Notification mean for R&D claims?
The Advance Notification is a new procedure that requires R&D tax credit claimants to inform HMRC of an intention to claim R&D relief, before they submit a claim. If you fail to provide an advanced notification, HMRC will write to you to say they have removed your claim for R&D tax relief from your company tax return.
In this article we will examine who needs to prepare advanced notification for R&D tax credits, what the deadlines are and what you need to do in order to comply.
When do I need to notify HMRC in advance about an R&D claim?
The advanced notification requirement applies for claims made relating to accounting periods which commence on or after 1st April 2023.
If you are a regular claimant of R&D tax credits, the chances will be that you do not need to provide advanced notification to HMRC.
There are two main scenarios in which you will be required to submit advanced notification for an R&D tax credit claim.
The first is if you are making a claim for the first time. The second is if you have previously claimed R&D tax relief, but your last claim was made more than three years ago – or, more technically speaking, if your last claim was made more than three years after the last date of your claim notification period.
Claim notification periods explained
A claim notification period begins on the first day of your accounting period and runs through until six months after your accounting period ends – so 18 months in total if your accounting period lasts 12 months. This is the final date by which you must submit your advance notification.
For example, if your accounting periods start on 1 October and you were to make a first R&D tax relief claim in the accounting period which begins on 1 October 2023, you would have until 31 March 2025 to provide HMRC with advanced notification of your claim.
A further scenario in which advanced notification for R&D tax relief may be required
There is one further scenario in which you may need to supply advanced notification to HMRC for your R&D tax relief. This is if you are claiming for two consecutive accounting periods and your previous claim was submitted in the last six months of your company tax return amendment window.
This may not be straightforward. If you are claiming for two consecutive accounting periods and are unsure if this will apply to you, our team of R&D experts are on hand to help.
What information do I need to submit to HMRC in advance?
Just like the newly required HMRC R&D additional information form, there is a comprehensive list of information that you will need to provide in your advance notification. This includes:
- Your company’s unique taxpayer reference (UTR) – the one on your company tax return.
- Your tax adviser’s contact details (if you are using one).
- The person in your company who has overall responsibility for the claim – a senior R&D contact like a director.
- The dates of the beginning and end of your period of account.
- Confirmation of the start and end dates of your accounting period for which you are making the R&D claim – matching those shown in your company tax return.
- An overview of the intended R&D activities (just high-level) outlining how your projects will meet HMRC’s standard definition of R&D. No evidence is required at this advance notification stage.
How can Kene Partners help with advance notification?
Working strategically with specialist R&D advisers is invaluable. We can ensure your whole business is set up to capture the full value of your claims and giving you extra competitive advantage through your innovation.
This includes helping you stay informed on new compliance processes such as advance notification and the additional information form, as well as completing them correctly. We also help you instil robust record-keeping processes so that every aspect of your claim can be backed up with evidence, greatly reducing the risk of an HMRC enquiry.
Our multi-disciplinary team, including chartered tax advisers, engineers and science and technology PhDs, is already fully up to speed with the advance notification process. If you would like to discuss how it will affect your business, and how we can help you prepare an optimised, compliant claim, get in touch today.