R&D claim pre-notification: How does it work, and what can be done if it’s missed?

Over the past three years, HMRC have introduced many changes to the R&D tax relief schemes. Several of these applied to claims with start dates on or after 1st April 2023 or later, so we’re only just starting to see the impact of these.

Pre-notification for R&D claims was introduced in 2023, and applies to claims starting on or after 1st April 2023. It is required for any company wishing to claim R&D tax relief that hasn’t claimed before, or that hasn’t submitted a claim within the last three years.

As around 20% of claims made each year are for first-time claimants, and many more will be for companies that haven’t claimed recently, it affects a relatively large number of claims.

How does pre-notification work?

Companies can notify HMRC any time from the first day of the claim period to six months after the end of the claim period – this is known as the claim notification period.

Pre-notification is required if:

• The company has never claimed R&D tax relief before, or
• The company has not submitted a claim for R&D tax relief in the three yearly prior to the end of the claim notification period, or
• The only claims that the company has submitted within the three years prior to the end of the claim notification period were for periods starting before 1st April 2023 and submitted as amendments to the CT600 after 1st April 2023.

Submitting the notification is relatively simple – all the claimant needs to do is fill out the Claim Notification Form, giving basic details about the claim and projects.

Can claims be submitted if pre-notification is missed?

HMRC had stated that it would reject claims where a required pre-notification has not been submitted. However, it has since clarified its stance on this. We will go into more detail about the updated guidance in the next article in this newsletter.

What has the impact been so far?

Large numbers of claims have been missed or rejected by HMRC because the company and their advisers did not realise that they needed to pre-notify. This has had a big impact on companies that have claimed every year for a number of years, but recent claims have been made as amendments.

Time will tell whether this will have a significant impact on the overall number of claims made, but we’d expect it to make a noticeable difference.

In addition to this, advisers and accountants are changing their behaviour, with many choosing to notify HMRC about any potential R&D claim rather than risk claims being invalid.

As with many of the recent changes, the impact is being felt more keenly by accountants and advisors who prepare small numbers of claims every year, and for whom keeping up with the changes is more difficult.

In summary, the introduction of R&D claim pre-notification has added another layer of complexity to an already challenging environment.

With HMRC standing firm on rejecting claims where a required notification hasn’t been submitted, it’s more important than ever for accountants and advisers to stay on top of these requirements, particularly if they only handle a handful of claims each year.

At WhisperClaims, we’re here to help. Our combination of software and expert Advice Line support is designed to guide you through the claims process efficiently and compliantly, giving you confidence that you’re meeting every requirement.

If you would like to find out more about how WhisperClaims can support your firm, why not book a demo?

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