{"id":24076,"date":"2023-02-07T10:42:27","date_gmt":"2023-02-07T10:42:27","guid":{"rendered":"https:\/\/smh.group\/?p=24076"},"modified":"2023-02-15T13:50:55","modified_gmt":"2023-02-15T13:50:55","slug":"not-claimed-rd-in-the-past-3-years-dont-leave-it-too-late","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/not-claimed-rd-in-the-past-3-years-dont-leave-it-too-late\/","title":{"rendered":"Not claimed R&#038;D in the past 3 years? Don\u2019t leave it too late!"},"content":{"rendered":"<p><strong>The draft legislation for the upcoming changes to R&amp;D tax relief were revealed as part of Legislation Day. There were few surprises where R&amp;D tax relief was concerned as many of the forthcoming changes had been widely publicised already.<\/strong><\/p>\n<p>The changes will affect accounting periods beginning on or after 1<sup>st<\/sup>\u00a0April 2023.<\/p>\n<p><strong>The key changes include:<\/strong><\/p>\n<ul>\n<li>The expansion of qualifying expenditure to include data and cloud computing costs associated with R&amp;D activity. Currently, only the cost of software licenses is eligible for the relief.<\/li>\n<li>Refocusing the reliefs towards innovation undertaken in the UK. A new condition will be added which dictates that the expenditure on subcontracted R&amp;D and externally provided workers (EPWs) must be incurred within the UK. Where the activity is performed overseas, additional relief will be denied.<\/li>\n<li>New legislation will be introduced that requires all Corporation Tax returns containing an R&amp;D claim, including amended returns, to be submitted digitally through HMRC\u2019s tax return portal.<\/li>\n<li>Claims will need to include details of any agent who has advised the company on compiling the claim.<\/li>\n<\/ul>\n<p>Whilst these changes are largely supported by many associated with the relief,\u00a0<strong>one aspect of the new legislation is likely to cause consternation amongst advisers and claimant companies<\/strong>. HMRC had already suggested that from April 2023, a requirement to pre-notify HMRC would be introduced. Legislation Day provided more clarity on this aspect of the forthcoming changes.<\/p>\n<p>For accounting periods beginning on or after 1st April 2023, companies will need to inform HMRC, in advance, that they plan to make an R&amp;D claim. They will need to do this, using a digital service,\u00a0<strong>within 6 months of the end of the period to which the claim relates<\/strong>.<\/p>\n<p>Thankfully, the announcement contained a key exemption to the pre-notification requirement. Companies that have claimed in one of the preceding three accounting periods will not need to pre-notify. This is welcome news for all companies which have claimed R&amp;D tax relief in a recent accounting period.<\/p>\n<p>Despite this, the impact of the new changes cannot be overstated for companies which have not previously made a claim for R&amp;D tax relief (or have not claimed in the last 3 years). Under current rules, a company is often able to make a claim for the previous two accounting periods by taking advantage of the statutory right to amend a tax return up to 12 months after the filing deadline.<\/p>\n<p>Under the new rules, and assuming the company had not made a claim in any of the preceding 3 accounting periods, the company would not be able to make a claim for an accounting period beginning on or after 1<sup>st<\/sup>\u00a0April 2023 if it hadn\u2019t pre-notified HMRC of its intention to do so within 6 months of the end of that accounting period.<\/p>\n<p>For example, a company with a 31 March 2024 year end (and which hadn\u2019t previously claimed in any of the preceding 3 years) would not be able to claim unless it had notified HMRC of its intention to do so by 30<sup>th<\/sup>\u00a0September 2024.<\/p>\n<p>Whilst SMH Group supports many of the measures introduced by HMRC to combat fraud and error in the system, we\u2019re viewing the pre-notification rules as questionable at best. Many view the change as grossly unfair.<\/p>\n<p><strong>What does this mean for potential claimant companies?<\/strong><\/p>\n<p>The pre-notification rules mean that companies which have not previously made claims in recent years but intend to do so in the future must take action within 6 months of their accounting period end dates. At SMH Group we can advise on the various timing issues which will be presented as a result of the forthcoming changes.<\/p>\n<p>HMRC are welcoming feedback on the proposed changes. At SMH Group, we expect that many will be providing feedback and comment on this controversial change.<\/p>\n<p>The message is clear.\u00a0<strong>If you\u2019re thinking of making a claim and haven\u2019t made a claim in the last 3 years, plan ahead now<\/strong>.<\/p>\n<p>Contact your account manager or reach out to us on <strong>0114 266 4432<\/strong> or <a href=\"mailto:info@smh.group\"><strong>info@smh.group<\/strong><\/a> to discuss this in more detail.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The draft legislation for the upcoming changes to R&#038;D tax relief were revealed as part of Legislation Day. There were few surprises where R&#038;D tax relief was concerned as many of the forthcoming changes had been widely publicised already.<\/p>\n","protected":false},"author":4,"featured_media":17983,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3],"tags":[11,402,403,19],"class_list":["post-24076","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smh-accounting-business-advisory","tag-hmrc","tag-rd","tag-research-development","tag-tax"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Not claimed R&amp;D in the past 3 years? 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