R&D Tax Relief: Pre-notification may be required by 30 June 2025
If your company plans to claim Research & Development (R&D) tax relief for the year ending 31 December 2024, you may need to pre-notify HMRC of your intention by 30 June 2025 to remain eligible.
Does this apply to you?
Pre-notification is required if:
- No R&D claim has been submitted since 1 July 2022, or
- The only R&D claim submitted since that date was included in an amended corporation tax return filed on or after 1 April 2023.
Failure to pre-notify HMRC by the deadline will result in the loss of eligibility to claim R&D relief for that accounting period.
Any R&D claim made for an accounting period beginning before 1 April 2023, that is included in the company’s corporation tax return only by virtue of an amended return made on or after 1 April 2023, will be ignored.
There is no legislative recourse for failure to pre-notify, including any statutory right of appeal, so it is imperative that pre-notification is made when it is required.
Example
To confirm, pre-notification is required for accounting periods starting on or after 1 April 2023 only.
As an example, this means the following for ABC Ltd (which has a 31 December year-end):
- The claim for 2022, which was submitted via an amended return after 1 April 2023, is ignored for the purposes of determining exemption from pre-notification.
- The claim for 2023:
- If submitted via the original corporation tax return, then no pre-notification is required.
- If no claim was submitted, or it was submitted via an amended return after 1 April 2023, pre-notification is required for 2024.
The claim for 2024, if required, must be pre-notified by 30 June 2025 to be valid.
Other points to consider
Other points to consider
Invalid or Disallowed Claims
You may have ‘made’ a claim; however, if HMRC has removed this claim from your tax return either through the enquiry process,the Fraud Investigation Service or for any other reason by virtue of Schedule 18, Paragraph 16 of the Finance Act 1998 this will not count as a valid claim. Pre-notification will be required unless there is another valid claim within the window.
Protective Pre-Notification (PCN)
If someone is in an enquiry, we recommend a ‘protective’ PCN. If, down the line, a claim is removed and no PCN was submitted, the company may have passed their 6-month window to file one. There is currently no legislative recourse to then claim relief for that period.
Group Companies
Groups are viewed as individual entities. A valid claim in one company cannot be used to cover another in determining whether PCN is required. This is particularly important during M&A activity.
Updated HMRC Guidance
HMRC has recognised its initial guidance was incorrect. Companies with March, April or May 2024 period ends may still be eligible to claim relief, if they submitted an amended return post 1 April 2023.
We are here to help
If you require any assistance with understanding where pre-notification is required and how to process or R&D tax relief generally, please get in touch with a member of our specialist R&D tax relief team.
