With all of the recent changes to the R&D tax relief scheme, we have put together some of the basic information about claiming. Some of this information has changed, and some will be familiar to companies that have claimed before.
Claimable periods
R&D tax relief claims are submitted with the tax return(s) for the company. In most cases, the claim will be made in arrears and will cover the same period as the company’s accounts. If the company has a shortened accounting period then the R&D tax relief claim will be submitted for that period. If a company has an extended accounting period then R&D tax relief claims should be made separately for each 12-month or less tax sub-period. Since changes to R&D tax relief rates are generally applied from 1 April in any year, R&D eligible costs need to be split into “year start date to 31st March” and “1st April to year end date”, for any years in which R&D tax relief rate changes have taken place.
show lessProject start and end dates
Qualifying R&D work on a project begins when a scientific or technological uncertainty has been identified. The completion of qualifying R&D work is when the identified technological uncertainty has been fully resolved, which might be when the knowledge is published, or a prototype with all the functional characteristics has been created.
If there are issues that pose new scientific or technological uncertainties, new R&D can be claimed. But, you have to be able to prove there is R&D work beyond routine fixing.
Each R&D tax relief claim has to relate to the R&D qualifying work actually done in that year. You can’t claim for the same qualifying work across several years. However, you can claim for continuing projects, providing there has been different R&D qualifying work in a further year.
You do not have to be successful in your project. If you have been trying to resolve scientific or technological uncertainty, but have not yet succeeded your R&D work can be claimed until you abandon that work.
show lessGrant funding and subsidised expenditure
The changes to the way that contracted out work on R&D projects means that for financial periods starting on or after 1st April 2024, there is no distinction between regular R&D and grant-funded R&D. If a company receives a grant or support towards their R&D expenditure then this will not impact the value of their claim.
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