The deadline for claiming R&D tax relief


R&D claim deadline

Claims for research and development tax credits among British companies are on the rise. This is due to a growing awareness both of their existence and of the benefits they can bring to both profit and loss-making businesses. But if you’ve only just discovered the scheme, is it too late to make a claim?

The claim deadline

If you’ve only just discovered that a past project is eligible for R&D tax credits, the good news is it may not be too late to claim. Every business has two years from the end of the accounting period in which the project was undertaken to make an R&D claim. This is because R&D tax credits are typically awarded as a reduction on your Corporation Tax bill, and the deadline for amending your CT return is two years after the end of the accounting period.

If, for example, you carried out a research project in June 2017 and filed the accounts for that year on 31 March 2018, then you have until 31 March 2020 to amend your tax return and claim for that spend.

Differences for startups

If your business was in its first year of trading when the research project took place, the rules may be slightly different. The date on which new businesses register with Companies House is their incorporation date, and their first accounting period spans 12 months from that date.

So, if you registered on 30 June 2016 and carried out the activity in March 2017, then filed the accounts on 30 June 2017, you would have until 30 June 2019 to make your claim.

That said, many businesses choose to move their accounting year-end date to 31 March so that it coincides with the fiscal year. So, a startup’s first financial period could end up spanning anything between 6-18 months. Regardless of this, an R&D tax credit claim for a startup in its first year of trading will still be two years after the end of the first accounting period.

Making a backdated claim

Backdated claims are typically processed in one go, which could result in a significant cash injection for your business. If you think you have an eligible claim that will need to be made in retrospect, you’ll need to sit down with a qualified R&D tax solutions expert to work out the details of the claim. These experts have the knowledge and experience to assist you with calculations and the preparation of documents to make a solid case for the reward.

With the average claim estimated to be around £60,000, it’s well worth taking action if you believe your project is eligible. Even if your activity started before the deadline for a claim, you can still recoup some costs for any activity that was ongoing into the window for which you can claim. Many businesses will find this worth doing, on average 25 per cent of costs on staffing, materials and software licences can be recovered.

For help with your R&D tax credit claim, contact a tax specialist today.


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