You can claim Research and Development Tax Credits up to two years after the end of the accounting period in which your qualifying R&D took place.
Making a claim for R&D Tax Relief could produce a significant financial windfall for your company. In the 2019/202 tax year, the average R&D Tax Credits claim rose to nearly £90,000: a snapshot of the levels of funding available to qualifying businesses through this generous scheme.
However, even companies that satisfy HMRC’s lengthy list of eligibility criteria for R&D Tax Credits can easily find themselves surrendering the entirety of their cash or tax relief entitlement by passing the strict R&D claim deadline. This can be an extremely costly mistake, given the sums involved.
To help you avoid this possibility, this blog will explain the key things you need to know about the R&D tax claim deadline, what happens if you miss it, and what you should do if you’re worried about losing your opportunity to claim.
When is the R&D Tax Credits Claim Deadline?
While many companies file for R&D Tax Credits annually, in order to access their funding quickly, you have up to 2 years after the end of the accountancy period in which the R&D was performed to submit your claim.
So, if you conducted qualifying R&D between January and July 2020, and your financial year ended on 1 December, your deadline for claiming R&D Tax Relief on that work would be 1 December 2022.
This applies to both SME R&D Tax Relief and the Research and Development expenditure credit (RDEC) scheme.
This is in line with HMRC’s Statement of Practice, which explains the agency’s use of time limits and treatments of late claims.
Typically, two years should be plenty of time to make your R&D tax claim, but there are challenges that could delay or halt your application. If you’re running out of time to submit your claim, contact our R&D tax specialists for help.
Can you Claim R&D Tax Relief after filing your tax return?
You can make an R&D Tax claim even if you have already filed your corporate tax return for the financial year in which your development work took place.
You simply need to amend your CT600 for that period with your financial calculations, file your technical narrative (if you choose to go that route) and resubmit.
Making an R&D claim with an amended CT600 isn’t only possible, it may result in HMRC sending your claim directly to an R&D specialist, which could lead to your claim being processed faster.
What if you miss the R&D claim deadline?
The implications of missing the R&D tax claim deadline are not the same as those you can face for filing your accounts late.
If you don’t file your accounts on time, you could be fined by HMRC. However, if you miss the R&D claim deadline, you’ll forfeit the entirety of your tax relief or cash credit, and you’ll never be able to recover it.
That said, HMRC does recognise that, in certain circumstances, companies are legitimately unable to submit their claim before their statutory deadline. HMRC will accept these claims, providing the ‘exceptional reasons’ were outside of the company’s control.
This would include:
- You and your agents (your accountants, R&D Tax Credits specialists, etc) were unaware of profits that you could claim relief on when the deadline passed
- The amount of a profit or loss depended on discussions with an HMRC inspector which were not complete when the deadline passed, and the delay in agreeing the profit/loss is not substantially your fault or the fault of your agents
It also includes situations in which all of the following conditions are true:
- An officer of your company was ill or otherwise absent for a good reason
- The absence or illness arose at a critical time and prevented the making of a claim within the normal time limit
- There was good reason why your claim was not made before the time of the absence or illness
- There was no other person who could have made your claim within the normal time limit
Worried about missing the R&D Tax Claim deadline?
In most cases, companies don’t miss the R&D Tax Credit deadline because of ‘exceptional reasons’. They do it because they don’t have the resources to assemble their application or because they don’t realise how long it takes to put a detailed, fully-compliant application together.
If you find yourself in either situation, don’t worry. GrantTree is here to help. Our tax and technical specialists are adept at turning both one- and two-year claims around quickly. Sometimes in less than a week.
Read our guide to R&D Tax Credits to learn more about the R&D claims process, or contact GrantTree to get started – before losing your chance to secure thousands of pounds in R&D Tax Credits funding.
Our team is standing by to help.
