Action required for companies with 31 March 2024 year ends that undertake R&D
As you may be aware, the Advance Notification requirement for companies undertaken research and development activities was introduced for accounting periods beginning on or after 1 April 2023. Whilst this requirement has been around for close to 18 months, the vast majority of companies will not yet have been affected by the rules.
With a few minor exceptions, the first accounting period end to be affected by the rules will be periods ending on 31 March 2024. If you have clients with this accounts reference date it is extremely important that you consider whether the advance notification applies to them.
The reason? Clients have six months following the end of their accounting period to submit the Advance Notification form and advise HMRC of their intention to make an R&D claim. As such, companies with a 31 March 2024 year end will potentially need to submit this form by the end of the month.
Please get in touch should you need any assistance, whatsoever, in completing the notification process.
Important note – existing claimants may be caught by the notification rule
Whilst the new rules are aimed at new claimants, or where the company has not made a claim in the three years preceding the end of the notification period, the intricacies of the legislation may, in some instances, catch out claimants that claim on a yearly basis. It is therefore essential that even if a company makes claims year-on-year, the rules around the advance notification requirement are carefully considered.
A company may need to submit a claim notification form for two consecutive accounting periods if the previous claim was submitted in the last 6 months of the company tax return amendment window. For example – for a first time claimant claiming for the period ended 31 March 2024 an advance notification submission is required before 30 September 2024. If the R&D claim (for the March 2024 period) is not then submitted until after 1 October 2025, then you must also make an advance notification submission for the year ending 31 March 2025.
Failure to either submit the Advance Notification Form or submit your R&D claim (using HMRC’s Additional Information Form – AIF) within the claim notification period (i.e. by 30 September 2024) will render the claim invalid and companies will lose the ability to claim the relief for that period.
Follow our link Advanced Notification - The Rules to a recent YesTax article explaining the new legislation. Or better still, get in touch and we can help.
The rules are complex - it is therefore imperative you review this requirement. Given there is a lot to navigate, it’s best to speak to us in good time. We’re happy to help and assess if a company is required to pre-notify.
If we are already dealing with your client, we will automatically assess their claim under these new rules. However, if there are others within your client base, who would benefit from a review, then please let us know.
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