Advance notification of R&D claims may cause problems for small companies, says ATT

The government should rethink its plan to require companies to notify HMRC in advance that they intend to claim research and development (R&D) tax reliefs says the ATT. In its response to the Treasury paper on reforming R&D the association suggests the measure risks denying tax relief to the smallest and newest companies that need this tax relief the most.

While supporting the government’s aim of tackling abuse of R&D relief schemes the ATT was concerned that the proposed requirement for companies to notify a claim in advance may affect the ability of entities undertaking genuine R&D to access the relief to which they are entitled.

Michael Steed co-chair of ATT’s technical steering group said: ‘In particular we are concerned that the smallest and newest-formed companies which are often most in need of the support offered by R&D relief...