Why you should not leave your research and development tax relief claim to the last minute
last minute R&D tax relief, tax relief, randd tax relief software

To understand why you shouldn’t leave your R&D tax relief claim to the last minute, let’s consider the following example. Robert is a busy entrepreneur who is responsible for his business’ financial success. Robert has heard about research and development tax relief previously but never had the time to fully investigate the possibility of claiming. Although he did know that claiming can help by providing additional cash flow it was never on his priority list to pursue a claim. So what are some things that happen when you delay your claim?

By delaying your claim, you are also delaying your benefit.

The first and most simple point, you are delaying your benefit.

How to submit an R&D claim?

All limited companies have the statutory right to amend their corporation tax returns retrospectively up to two years past the relevant accounting period year end date. This date is the statutory deadline for submitting a research and development claim. The R&D claim is submitted via the corporation tax return form (CT600) by filling out the relevant boxes and attaching the technical narrative PDF as proof of the R&D work carried out.

What are the requirements for submitting a claim?

Before the research and development claim can be submitted, the CT600 has to be prepared. Before the CT600 can be completed the company needs to finalise its statutory accounts as the numbers from the accounts plug in to the CT600.

Delayed preparation and or completion of company accounts and CT600 form are one of the top causes of delay during the R&D claiming process, followed by people answering the necessary questions for the technical narrative of the R&D projects. Ideally, try to avoid having to rush making your R&D tax relief claim as, firstly, it’s stressful, secondly, it doesn’t allow enough time for a thorough R&D cost and narrative evaluation. This could lead to mistakes or certain R&D projects falling through the cracks.

The narrative provides proof of the type and level of research and development activity within the business. Although gathering information and turning this into a good technical narrative takes time and should also be accounted for in the context of submitting a timely R&D claim, if you are recording your R&D as you go along in Novel, this significantly speeds up the process.

Best time to submit a claim

In short, you can submit as soon as all the above required pieces are finalised. It is worth mentioning, that there are certain times throughout the year that are extremely busy for HMRC. Where possible to submit earlier do try to avoid submitting claims in December and March.

The reason for this is because these dates coincide with the calendar year end and the UK’s tax year end, as a result, HMRC tends to be very busy and it may take longer for them to process your R&D tax relief claim, thus delaying your benefit.

Real time tracking of R&D

There are numerous good reasons for tracking the R&D work in real time but one of the most important ones is that it facilitates an expedient delivery of the technical narrative. By keeping track and noting down R&D activity on the go, you are recording more accurate information and are able to go into more detail as it is fresh in your memory. When it comes to writing up the technical narrative at the end of the year, all that is required is editing what is already there without worrying whether any qualifying work has been left out.

Do your next R&D tax relief claim with Novel

Overall, we highly recommend making a timely submission as this can greatly impact your cash flow and support all aspects of your business. You can generate HMRC-compliant R&D tax relief claims without the complexity quickly and efficiently as well as take advantage of a suite of features: education content, financial aggregators and record ongoing R&D all within Novel.

Preparing R&D tax relief claims hasn’t been easier. 

Subscribe to Novel today.