News & Blog

R&D Tax Relief Procedures: HMRC's Latest Notification Requirement

11th March 2024

By Derek Gemmell, Head of Innovations Tax AAB 

In today's fast-paced business landscape, where staying ahead often means innovating and adapting to change, research and development (R&D) tax credits have emerged as a key tool for businesses, especially for small and medium-sized enterprises (SMEs).  As an R&D tax credit specialist, I've witnessed firsthand the transformative impact that these incentives can have on businesses.

The key to unlocking the full potential of R&D tax credits lies in maximising the claim. This involves identifying all eligible R&D activities and expenses and leveraging the available incentives to their fullest extent. By doing so, businesses not only benefit financially but also gain a competitive edge in the market.

R&D tax credits are a government incentive designed to reward UK companies for investing in innovation. They are a valuable source of cash for businesses to invest in accelerating their R&D, hiring new staff and ultimately growing. They serve as a means for businesses to recoup a portion of the costs associated with developing new products and services.

Recently, HMRC has implemented new legislation aimed at ensuring the integrity of R&D tax relief claims. This legislation addresses concerns about the validity of last-minute claims and requires companies to notify HMRC of their intention to claim R&D tax relief for eligible expenditures. This notification must be submitted electronically through an Advance Notification Form within a specific timeframe.

The notification period begins at the start of the accounting period in which the R&D expenditure was incurred and end six months after the end of the relevant accounting period. It's important to note that not all companies are obligated to notify HMRC, but those who fail to do so risk losing out on valuable tax relief. 

At AAB we understand the complexities of R&D tax relief and can provide tailored assistance to ensure that your company maximises its claim while complying with HMRC regulations. We offer strategic advice and measures to help you maximise the value of your R&D tax relief claim, ensuring that you receive the full benefits available to your business.

We can also help determine whether your company qualifies for R&D tax relief by assessing various factors such as the nature of your R&D activities and your financial standing. Our team can work closely with you to prepare a robust claim in accordance with the latest legislation, ensuring that all eligible expenses are properly documented and accounted for. 

The significance of R&D tax credits cannot be overstated. Beyond mere financial relief, they offer competitiveness, growth, and long-term sustainability. By providing businesses with the necessary financial support, R&D tax credits enable them to embark on ambitious R&D projects that might otherwise be financially prohibitive. This, in turn, facilitates innovation, economical growth and technological advancement and by working with us at AAB, you can be confident that the claim is accurate, comprehensive and maximises the available incentives