6 July 2023 | 6 min read
In 2021 HMRC undertook a review of tax reliefs to ensure that they were fit for purpose as an efficient mechanism for stimulating innovation with government funds. In November 2021 HMRC reported the data together with an outline proposal for legislation amendments.
HMRC took consultation before releasing further details in the Chancellor’s 2022 Spring Statement. During the summer of 22 the Government published a draft of the legislation, which is currently with the House of Commons and House of Lords before Royal Assent planned for this summer.
What’s about to happen from 1st August 2023?
Additional information will need to be submitted together with the claim using HMRC’s web-based portal. This coincides with Making Tax Digital (MTD) alignment for innovation relief claims requiring digital submission. Included in the additional information required is name of any agent/advisor assisting with claim preparation together with a named senior officer of the claimant company as signatory.
What’s just happened for claims on or after 1st April 2023
What else is to come? 1st April 2024
Subcontracted & Externally Provided Workers (EPWs) must be from the UK with some exceptional circumstances.
*The Pre-Notification requirement is a new rule that was introduced in April 2023. It applies to certain companies that are claiming Research and Development (R&D) tax relief. Under this rule, companies must notify HMRC of their intent to claim R&D tax relief within 6 months from the end of their accounting period.
The purpose of the Pre-Notification requirement is to give HMRC more time to assess claims and to prevent fraudulent claims. Companies that fail to comply with the Pre-Notification requirement will have their claims rejected.
The following companies are required to pre-notify HMRC of their intent to claim R&D tax relief:
Companies that are required to pre-notify HMRC of their intent to claim R&D tax relief can do so by using the online Pre-Notification service. The Pre-Notification service is available on the HMRC website.
The Pre-Notification service requires companies to provide the following information:
Once a company has pre-notified HMRC of its intent to claim R&D tax relief, HMRC will review the claim and will contact the company if there are any further questions.
The Pre-Notification requirement is a new rule, and it is still being developed. It is important to check with HMRC for the latest information on the Pre-Notification requirement.