If you have been carrying out development work on a new product or service in earlier years and have only just stumbled across R&D tax credits, you may be concerned – thinking you may too late to make a claim…
The good news is that this may not be the case – as R&D tax claims can be filed retrospectively.
How to claim R&D tax credits
A claim for UK research and development tax credits is made within your company corporation tax return (‘CT600’).
This CT600 tax return is typically completed and filed shortly after your accounting period end alongside the preparation and filing of your company fianancial accounts.
What if I have already filed my company tax return (CT600) for the period in which the qualifying R&D activities took place?
No problem – provided you are still within the permitted time limits (see further below) then you can file an amended return. This time, you will include the claim for R&D tax relief within the amended CT600 corporation tax return.
How long is the permitted time limit for filing a retrospective claim for R&D tax credits?
A company can make a restrospective claim for enhanced R&D tax credit relief for your financial accounting periods ending in the past two years.
Example: Late R&D tax credit claim
Say today’s date is 02 July 2020, a company with a 31 December accounting period end would be eligible to make retrospective claims for R&D tax relief for its accounting periods ended:
31 December 2018 – time limit for making a claim expires on 31 December 2020
31 December 2019 – time limit for making a claim expires on 31 December 2021
You can see that the time limit runs to two years after the accounting period in each case.
So up to 31 December 2020, it is possible for a company with a 31 December financial year end to make a claim for R&D tax credits on a research and development project that was carried out way back in January 2018! Good to know.
But don’t take this good news as a basis for “putting off” or delaying making your claim. There is still lots of work for us to do to help you maximise your claim and avoid any last minute rush!
Plus, the longer after the project ends that you delay, the more the facts and figures can become 'hazy' in the midsts of time, potentially resulting in a less optimal R&D tax credit claim.