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What’s the Deadline to Make an R&D Tax Claim?

Each year, scores of companies miss the deadline to make a claim for R&D tax relief, resulting in the loss of a valuable cash flow opportunity. Some companies simply don’t have the time to make the claim, or the team behind the R&D is no longer available, or even the value of the claim isn’t worth the time investment. However, businesses should never miss out on their entitlement because they don’t know when the deadline is.

This article discusses the timelines of making a claim and how to get ahead to not miss out.

Businesses can claim R&D tax relief two years from the end of the accounting period of the R&D work. The claim can be made in a company tax return or in an amendment to it.

This means that a company claiming for an accounting period ending 31^st December 2023 can submit a claim for that R&D work until 31^st December 2025.

This deadline doesn’t change for extended or shortened accounting periods, but in the case of an extended accounting period, you will need to provide information that covers the initial twelve-month period and then again for the shortened additional period.

The timelines behind claim preparation vary widely, depending on the claim size, the number of projects, the resources available when preparing the claim and whether the company uses an advisor.

At Myriad, we’ve turned around claims within a week if the time scales demand it. However, for a robust claim (and to avoid unnecessary stress!), we usually see claims being submitted within a month from beginning to end. This is to ensure all eligible activities are captured and that the project leads are able to provide comprehensive project details without disrupting their day-to-day activities.

Companies with many projects, complex accounting treatment or limited access to project leads (where the subcontractors may not be available or the staff do not have the resources to handle the claim) will take longer than a month to complete their claim. This goes double for companies that complete their claims in-house.

Using an advisor to prepare your claim ensures that all relevant projects are captured, the report is written to the standard expected by HMRC, and the full benefit can be received without delay.

Since HMRC’s investigation into fraud and error in the R&D tax relief scheme, their timelines for paying out have slowed significantly and were never fully restored. HMRC aims to pay out on claims within 40 days (6 weeks). However, some companies have been left waiting longer than 40 days, so it’s important not to depend on an R&D tax credit for anything critical.

One reason for the additional delays is HMRC’s additional scrutiny of claims following the discovery of a high level of non-compliant claims. HMRC can open a compliance check into any claim, irrespective of how long a company has been making claims or how strongly defended it is. In some cases, HMRC will open their compliance check before paying out, requiring a company to prove its eligibility across a months-long process before it can receive its benefit.

To make a valid claim, there are only a few specific requirements:

• Submitting an accurate Additional Information Form (AIF)
• Submitting an original or amended Company Tax Return (CT600) and the CT600L
• In some cases, submitting a claim notification form

Additional Information Form

Since August 2023, companies have been required to submit an Additional Information Form to demonstrate that their R&D is qualifying. This should be submitted before or on the day of the submission of the Company Tax Return.

Companies need to provide:

• basic details about the company, the contact details and the accounting period
• qualifying expenditure details per category
• details of projects you’re claiming for
• a description of the projects, depending on the number of projects

Companies claiming 1 to 3 projects need to describe all the projects being claimed for (i.e., 100% of the qualifying expenditure).

However, those claiming for 4 projects or more need to describe the lower of the following:

• the number of projects that account for a minimum of 50% of the qualifying expenditure (with a minimum of 3 projects described)
• 10 projects

Pre-Notification

For accounting periods starting on or after 1^st April 2023, some companies will need to complete extra steps to ensure they can receive their benefit. First-time claimants, or those who have not made a claim for a while, will need to submit a claim notification form to HMRC to inform them of their intent to make a claim.

Technical Report

Though not required to make a valid claim, many companies opt to provide a full technical report which covers more information than what is requested on the AIF to fully demonstrate how the projects meet the DSIT/BEIS Guidelines. This can be emailed directly to the R&D team at HMRC.

Costing Information

As with the technical report, many companies will also choose to provide a full breakdown of the costs, line by line and project by project, to pre-emptively answer any questions HMRC may have on the apportionments or methodologies used to arrive at the figures being claimed.

The safest way to make a claim is through a reputable and trusted adviser. R&D Tax Advisers have experience in assessing project eligibility, positioning information to emphasise a project's innovative aspects, and ensuring correct accounting treatment is applied. Of course, it is possible to do this without a specialist adviser, but it is not recommended without experience.

When selecting an adviser, ensure that they are established and have significant client testimony behind them. In the “Wild West” days of R&D tax relief, many companies sprung up to take advantage of HMRC’s low compliance checks and the inexperience of many claimants. These companies were not long registered and had little knowledge of the technologies or processes they were writing about.

Other services to consider are whether an adviser offers to support a claim through a potential compliance check and, if so, what their experience is in this area. With random checks becoming more common, an adviser who can help navigate the communication with HMRC has increasingly valuable benefits.

If you have questions about this article or the R&D tax credits scheme, contact us, or dive deeper into the world of R&D tax credits with our comprehensive R&D tax credits page.