If your company looks to make the next big breakthrough in science and technology, research and development credits can be a welcome way to lower your tax bill.
But when you’re focusing on seeing the project through, actually claiming the tax break is often the last thing you consider.
The good news is, you have time. Even after the work is over, there’s still some breathing space. But how long?
How far back can I claim?
Your company can claim R&D tax credits up to two years after the end of the relevant accounting period.
To maximise your claim, you should include all qualifying expenditures from the project during your accounting period, or up to two years after.
If you’ve already filed your corporation tax return, don’t worry, you’ll be able to revise your return to reflect the R&D costs you incur. This two-year window applies to both loss-making companies looking for cash credits and profit-making companies seeking tax relief.
As of this year, there are new rules for companies claiming R&D tax credits if their accounting period starts on or after 1 April 2023. If your company has this accounting period, you’ll have to send HMRC a notice of your intent to claim the credits within six months of the end of the project’s period.
New claimants who submit their claim within the six-month window of their accounting period ending will not need to send a notification.
As soon as you reach the claim deadline, you won’t be able to get back any of the money spent on your R&D project.
Claims outside of the deadline
HMRC will very rarely allow a company to make a claim once they miss the window. However, there are some exceptional circumstances where you may still be eligible for R&D tax credits outside of the two-year window.
As per HMRC guidance, you may still have a successful claim if:
- Your company and its agents were unaware of any profits which you could claim against.
- If your profit or loss calculations depended on an inspector’s decision, but there was still no outcome by the period’s expiry date.
If you start a project before the period when you can claim and it’s still ongoing, you could still be eligible for a claim, as well.
Extra tips on R&D credits
If you’re new to the R&D scheme, it’s important to understand what you’ll need to support your claim.
HMRC requires you to provide in-depth details of the project, including:
- The intent and advance you’re looking to make in your field
- Proof of whether there is a professional uncertainty
- Whether an industry professional could not reach the outcome.
Due to the complexity of the R&D system, we always recommend talking to a professional accounting team that has years of practical experience working alongside the scheme (like us, for example).
If you need help with your R&D claims, get in touch.