Wondering how far back can you claim R&D tax credits? You have up to 2 years after your accounting period ends to claim R&D tax credits. All of your qualifying expenditure for this period will need to be included in order to be submitted to HMRC.

At Williamson & Croft, we help businesses of all sizes make the most of their R&D tax credit allowances to ensure you claim everything you can before your R&D claim deadline. Speak to one of our R&D tax credit specialists today to make the most of your eligibility before it’s too late

What are the R&D accounting periods?

Accounting periods are typically 12 months long, running from April until March. For expenses incurred in any given accounting period, you will then have 2 years to submit an R&D claim for this time period.

Example: For the accounting period 1st April 2023 – 31st March 2024 you will have until 31st March 2026 – exactly 2 years later – to make your claim for R&D tax credits. 

Can you change your R&D accounting period?

Yes, while a year is the standard length you can either lengthen or shorten the accounting period that you are submitting a claim for. You change the length of your company’s financial year once every 5 years.

  • Shortening your accounting period – You can shorten your accounting period, for instance to 6 months. This could give you the ability to access your R&D tax credits more quickly than the typical yearly basis.
  • Lengthening your accounting period – If you wish, you can lengthen your accounting period, for instance to 18-months. 

However, it’s crucial to remember that this will not lengthen the amount of time that you can claim for. 

i.e. if you are trying to claim for a 12-month period that ended 2 years ago, you cannot lengthen the 12-month accounting period to an 18-month in order to regain R&D tax credits for the additional 6 months that have passed the 2-year R&D claim deadline. 

What’s the deadline for notifying HMRC of your intention to claim R&D tax credits?

This caveat can catch people out. While you have 2 years to make a retroactive R&D claim, if it’s your first time claiming you must notify HMRC of your intention to claim 6 months before you reach the end of your R&D claim deadline. If you do not do this you will forfeit your eligibility to claim.

R&D claims are notorious for their admin, including filling out additional information R&D forms as well as providing details of the expenditure you wish to claim for. That’s why many businesses find appointing R&D specialists a weight off their minds. Find out exactly how to choose an R&D tax credit advisor with our expert advice.

Need your R&D funding sooner? Explore advance funding

If you’re interested in receiving R&D tax credit relief sooner than the end of your accounting period you could explore advance funding. Advance R&D funding could entitle you to up to 80% of future R&D tax credits. 

As it can take up to 3 months for HMRC to process your R&D tax credit application, advance funding can be a good option if you need assistance quickly. We understand that unlocking working capital can be vital for the liquidity of innovation businesses. Speak to our R&D tax credit specialists to learn more about whether this could help you.

Is there any flexibility to claim outside of the 2-year R&D claim deadline?

HMRC tends to stick fairly strictly to the 2-year deadline. They may sometimes allow backdating later than 2-years in exceptional circumstances. The examples HMRC give for backdating tax credits are:

  • The claim window ending whilst your company was in discussions with an HMRC inspector about profit and loss if the disagreement about the correct figure was not your company’s fault 
  • You were unaware of profit on the project you wish to claim R&D tax credits for at the time of the 2-year window ending

These circumstances are rare, and even then you shouldn’t depend on them guaranteeing your eligibility to extend the time for your claim. This is why it’s crucial to have your claim in order well ahead of the deadline.

What if the R&D work you wish to claim for started before your accounting period?

Don’t worry if your R&D project kicked off before the accounting period you’re claiming for – you might still be eligible for R&D tax credits. Here’s how:

Ongoing projects: If your R&D project started earlier but is still active during the accounting period you’re claiming for, you can include it in your claim. The key is that you’re still working to solve scientific or technological uncertainties during the claimable period.

Recent completion: Even if the project wrapped up during one of your last two accounting periods, you can still claim for the work done during those periods.

Older projects: Unfortunately, if you cracked the scientific or technological puzzle more than two accounting periods ago, the R&D tax claim deadline for that work will have passed. 

Remember, it’s not about when the project started, but whether you were still grappling with uncertainties during the claimable period. If you’re unsure whether your project qualifies, don’t hesitate to chat with our R&D tax specialists at Williamson & Croft. We’re here to help you maximise your claim and ensure you don’t miss out on any credits you’re entitled to.

What kind of expenditure counts towards an R&D claim?

Now that we’ve answered the pressing question, how far back can you claim R&D tax credits? you might be left wondering exactly what the R&D tax credit restrictions are. After all, it makes sense to make the most of your claim.

Find out what you could claim from our R&D tax credit specialists

We know there’s a lot to wrap your head around when starting your journey to claiming R&D tax credits. Why not start by reading our short guide to the history of R&D tax credits to get to grips with the background of this scheme? If you’re ready to find out your businesses’ entitlement to R&D credits, simply get in touch for a no-obligation conversation with our R&D tax consultants.

Or, explore more answers to finance timeframe queries from our expert accounting team, such as:

Contact our team of R&D tax credit specialists at Williamson & Croft today.