How far back can you claim R&D tax credits

Feb 17, 2023 | Business tax

With changes being made by the Government at every turn, claiming money on your research & development (R&D) tax credits is still a fantastic way to source funds for your business.

“We’ve been doing loads of research, but we’re not sure – how far back can we claim?”

We get asked this question all the time, and the normal answer is: two years following the end of the last accounting period.

But there is never a one size fits all approach to R&D, so it’s worth understanding it before you consider filing your claim.


How far back can I claim?

You can claim for a tax return period (if you’ve already submitted it to HMRC) for a period of two years if you’ve not already requested relief for R&D.

As standard, the latest you can make changes to your corporation tax return is 24 months following the end of the accounting period, and R&D is a relief on this.


How to claim if you haven’t claimed R&D tax credits before

If you’re a large or well-established organisation, your accounting period will typically be 12 months. There are always exceptions to this, though.

An example 12-month deadline might look like this:

  • You file your accounts by 31 March each year
  • You have until 31 March 2023 to claim for your accounting period ending 31 March 2021
  • The actual deadline is midnight on 31 March 2023.

If you miss this deadline, it won’t be possible to claim tax relief on R&D-qualifying expenditure incurred between 1 April 2020 and 31 March 2021.

Both the SME R&D tax relief scheme and the Research and Development Expenditure Credit (RDEC) scheme offer corporation tax relief, so the 24-month deadline applies to both.


I’m a start-up: how can I claim?

Things can be different if you’re in your first year of operation. Your incorporation date is specified by the date you register your firm with Companies House.

This date will become the default registration date, so your first accounting period is set to twelve months from the end of that month.

For example: you started business on 4 April 2022: your 12-month period will be from 30 April 2022 until 30 April 2023.

Moving to another date is fairly common if this doesn’t suit your needs. This will change the length of your financial period and could last anywhere between 6 to 18 months.

But no matter how long your accounting period is, R&D tax credits must be filed two years from the end of each accounting period.

There are no exceptions to this rule – it exists regardless of your accounting period’s variation.


Will my start date affect my claim?

R&D projects that began before the two-year limit but are still in progress may be eligible for reimbursement.

No matter when you started the specific project, you can still claim if you can prove that you spent money on qualifying R&D activities during your most recent two accounting periods.


Let’s talk about R&D

Funding your project isn’t easy, especially when considering the legwork you have to do.

Your accountant can help you outsource a lot of the hard work, so you can focus on what you do best.

Get in touch with us today to talk about your R&D tax credit claim.

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