Are You Prepared For Pre-Notification?

HMRC recently confirmed that, from April 23rd 2022, companies considering applying for R&D tax relief will need to give advanced notification of their intention to claim within six months of the period-end for which they are planning to submit a claim. (Companies that have already submitted a claim on any of the three previous periods will not need to give prior notification.)

While this new process will serve to give HMRC staff greater visibility of upcoming work in the pipeline, it also creates an unexpected obstacle for companies new to the R&D tax relief scheme and with no previous track record of claims. Even though this may reduce the potential for opportunistic claims, it will also negatively impact a large proportion of legitimately claiming companies.

This change will require those companies with no previous claim experience to be much more agile in identifying and assessing the size of the opportunity before them, e.g:
• Is the work they have undertaken eligible for relief?
• Is there sufficient spend to make a claim worthwhile?
• More importantly, can they undertake this assessment within the six-month timeframe.

Get prepared for pre-notification

From April 2023 onwards there is likely to be a stampede of companies seeking to submit pre-notifications within the 6-month deadline, driven largely by zealous R&D providers. It may be more prudent to submit a claim prior to March 2023, for one of the two previous periods, thereby avoiding the rush for pre-notification next year. Alternatively, establishing a relationship with an R&D tax provider now, will facilitate the on-going analysis of R&D activity and expenditure, ensuring early confirmation on whether there is a legitimate claim and subsequent pre-notification.

We can help

ABGI is a consulting business working to accelerate our clients’ innovation activity by supporting the adoption of winning IP strategies, deploying world-class digitalisation solutions for design and manufacturing, as well as identifying and securing appropriate funding throughout the lifecycle of innovation projects. To find out more about how ABGI can help your company release its innovation potential, please contact Sandy Findlay on 07807 739033 or email sandy.findlay@abgi-uk.com

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