The pre-notification form for R&D Tax Claims - where to start for your clients
I think many of us had our ideas around the pre-notification form, for instance, what will it look like? What questions may be asked?
But one thing we can all agree on is that HMRC has kept to their key objective of reforming the R&D Tax Relief Scheme. Which was to ensure that the R&D Tax Claims being made are genuine and benefit those who are truly innovating the UK science and technology industries.
And one-way HMRC has done this is by adding in additional processes, such as the pre-notification form, which will help to tighten up the compliance process and filter out fraudulent R&D Tax Claims being made.
So naturally, a question in which you may be asking yourself is: “How can I best approach submitting a pre-notification form for my clients?”
Well, this blog post will discuss exactly that.
But just so we are all on the same page, let’s get the specifics out the way first.
Who is it for?
Companies who have not made an R&D claim in the previous three accounting periods who want to file a claim in a period of account. Usually the current or previous one.
What is the pre-notification form?
Limited companies are required to submit a pre-notification to HMRC to let them know they MAY file an R&D claim in the future. This is a Gform that requires simple information from the company, including:
Main Contact in the Claimant for R&D
Contact details for any agent involved in the R&D Tax Claim
Agent Reference Number
Period of Account the claim would be for
Accounting period the claim would be for
Overall, minor information is being requested. And with HMRC asking for main contact details, there is scope they could contact the claimant for more information.
When does this apply & deadlines
For periods starting on or after April 1st, 2023, and must be within six months of the end of the Period of Account. For example, if you started your Period of Account on the 1st of April 2023 to 31st March 2024, then you would have until 30th September 2024 to file the Gform.
You do not need to submit a notification if you have made a claim in the preceding three accounting periods.
There is no obligation to then make a claim even if you submit a pre-notification.
Simple as that.
However, it’s important to mention that if you miss the notification deadline for a claim, then unfortunately for that period, an R&D Tax Claim cannot be made, unless the company has made an R&D Tax Claim in any of the three preceding accounting periods.
Now, let’s get into what you came for.
Our recommended approach in submitting a pre-notification form for your clients
What does this mean for you, the Business Owner and Accountant?
It is up to you to be forward-thinking. Your clients are relying on you, and potentially your team, to manage their cashflow. So, take ownership on optimising their tax efficiency, as this will enhance their cashflow health.
So, what can you do for your client?
We recommend understanding your client’s business model. This can include, learning how their processes work, what’s their roadmap? What are their current, previous (within the last 2 years) and future projects? Really get to know their business. This way you will be able to better understand whether they may have now or in the future projects eligible for R&D Tax Relief. And achieving R&D Tax Relief for your clients means more savings, resulting in a healthier cashflow.
How can you do this?
It can be as simple as adding an R&D discussion to your next impact meeting with your client or adding it to the agenda at pre-year end meetings. Once you know if they are eligible, you can take the necessary steps to submit an R&D Tax Claim for your client. And one of the initial steps is submitting a pre-notification form! So don’t be afraid to submit a notification even if there is only the slightest potential a claim may be made later down the line; it’s better to be over-organised than under.
Submitting a pre-notification form can be done by yourself, your client managers, or your tax advisory representative. But as it’s a short form, we recommend that you, or your client managers, submit it – you know your client best and have the information at hand to breeze past this stage of the R&D Tax Claim process.
Short but Sweet
Hopefully, this post cuts through the noise of what the pre-notification form is as well as practical guidance, for yourself or your team, as to where to start before submitting a pre-notification form for your eligible clients for R&D Tax Relief.
Have any of you submitted a pre-notification form yet? Let us know in the comments 👇