Claim notification requirements have caused headaches for accountants and their clients since they came into effect from accounting periods starting on, or after, 1 April 2023.
Confusion comes from all avenues – the wild west of misadvice that comes from a Google search through to a general lack of understanding over how to apply the new rules.
HMRC’s incorrect guidance
To compound the issues in this already confusing area, HMRC itself published incorrect guidance in the Corporate Intangible Research & Development Manual (CIRD183000) on 8 Sept 2024, which was reiterated in the Research & Development Communication Forum meeting later in the same month. The correction wasn’t made until 17 October, six weeks later.
This error provided an inaccurate interpretation of the requirement for a claim notification and how exemptions were to be applied. This resulted in ambiguity in the process and many claimants finding themselves in a position of losing their ability to claim.
Many of us challenged HMRC on the series of events and the potential issues faced by claimants and finally, a concession has been agreed.
The good news
For clients effected by the incorrect information, HMRC has agreed an appeal process and will allow claims for an accounting period without a Claim Notification Form where the following apply:
- A company made a valid claim to R&D in an amendment to a return for an accounting period beginning before 1 April 2023, which was submitted to HMRC between 1 April 2023 and 30 November 2024 inclusive
- The accounting period for which a Claim Notification was not delivered, but ought to have been, had a claim notification period ending between 8 September 2024 and 30 November 2024.
In summary
You may have a client with an accounting period ending Mar24, Apr24 or May24, who didn’t file a Claim Notification Form (as at the time they believed one wasn’t required due to the guidance), and they therefore lost their ability to claim for that year. We recommend that you double check their position as this concession may allow an appeal to be made.
There was probably little choice for HMRC other than to make this amendment when their own written and verbal advice was shown to be inaccurate.
The continual lessons we see around R&D are that accountants and claimants need to know where to turn both for support and for a champion that is happy and confident to challenge HMRC where needed.
The minefield of inaccurate advice, either through misinterpretation from a specialist or misinterpretation from an internet search continues to prevail. Having a clear voice of clarity and technical understanding is crucial for everyone involved. Due diligence in which voice you listen to, is more important than ever.
