Reviewed by Clive Flood, Chief Operating Officer | April 2023.
R&D tax credits are a form of Corporation Tax relief and the latest you can amend your Corporation Tax return is typically 24 months after the end of the accounting period.
However, the rules have changed for accounting periods starting on or after 1 April 2023. For those accounting periods companies will need to inform HMRC of their intention to file a claim within 6 months from the end of the period to which the claim relates. This rule only applies to companies that have not made an R&D claim in any one of the preceding three calendar years. The effect of this is that brand new claimants to the R&D scheme will then only have a 6-month window (after their accounting period ends) in which to notify HMRC that they intend to make a claim as opposed to the previous two year window of opportunity (where there was no requirement to notify). If a new claimant submits their R&D claim within 6 months of their accounting period ending, then no notification is required.
For established businesses accounting periods are usually a standard 12 months, although there may be specific circumstances where they have been shortened or extended.
So as an example of the current 24 month deadline could look like this:
This is subject to the new rules that apply for accounting periods starting on or after 1 April 2023 where it will not be possible to claim for any period prior to the 6-month notification period unless the claimant has submitted a claim in one of the three preceding calendar years.
Both the SME R&D tax relief scheme and The Research and Development Expenditure Credit (RDEC) scheme offer Corporation Tax relief which is administered by HMRC via the company’s tax return, the same statutory deadlines for submitting an amended tax return therefore apply. Find out more about which R&D tax relief scheme would be best for you here.
Things can be a little different in your first year of business. The date you register your business with Companies House sets your incorporation date. It’s your incorporation date that becomes the default registration date so your first accounting period is set to 12 months from the end of that month.
If this isn’t convenient for you it’s very common to move your accounting period to another date. It follows that your first financial period can vary, from 6 to 18 months.
When it comes to claiming R&D tax credits the deadline for filing is currently two years from the end of each accounting period, regardless of the length of each accounting period. In actual fact, this applies if the length of your accounting period varies for any reason, not just because you are a new business. Or 6 months if the accounting period starts on or after 1 April 2023 and you have never made a claim before.
If you have started an R&D project prior to the current two year deadline, but the project is ongoing then it can still be considered for a claim. If we are able to identify qualifying expenditure incurred on qualifying R&D activity during your last two accounting periods, then you are currently still able to claim, regardless of when that particular project started. For accounting periods starting on or after 1 April 2023 the new rules will apply and either a claim will need to be prepared and submitted within 6 months of the accounting period end, or a notification of intention to claim must be made to HMRC (also within 6 months of the accounting period end).