How Do You Claim R&D Tax Credits for the First Time?

Making your first R&D tax credits claim can feel daunting. Get it wrong, and you may end up with a compliance check from HMRC. To avoid repayment, penalties and future scrutiny, it's essential to get it right first time.

Since August 2023, first-time claimants face specific requirements that didn't exist before, including mandatory notification forms and detailed documentation standards. This guide breaks down exactly what you need to know to submit a compliant claim.

What is the Advance Notification Form?

The Advance Notification Form (ANF) is HMRC's way of knowing you intend to claim R&D tax credits. It's a mandatory step for all first-time claimants and any company that hasn't claimed in the previous three accounting periods.

You'll need to submit this form within six months following the end of your accounting period. For instance, if your accounting period ended on 31 March 2024, you must submit the ANF by 30 September 2024.

Missing this deadline has serious consequences; your claim will be rejected, regardless of how strong your R&D project is.

The ANF itself is straightforward. It asks for basic company information and confirmation that you intend to claim. This is purely administrative, not technical – it doesn't assess whether your projects actually qualify for relief. You submit it through HMRC's online service using your Government Gateway credentials.

Think of the ANF as your ticket to claim. Without it, HMRC won't even process your submission. If you're unsure whether you've submitted one correctly, check your compliance status.

What is the Additional Information Form?

While the Advance Notification Form is simple, the Additional Information Form (AIF) requires detail. This document provides HMRC with a comprehensive breakdown of your R&D projects and costs, and must be submitted before you claim with your Corporation Tax return.

The AIF asks for specific information about your claim:

• Detailed project descriptions explaining the scientific or technological uncertainties you faced
• Complete cost breakdowns by category (staff, subcontractors, consumables, etc.)
• Details of any connected parties you worked with
• Contact details for the submitting party and any advisors you worked with

This might seem like a lot of paperwork, but it's building your audit trail. The AIF is your first line of defence against a compliance check or enquiry from HMRC. Companies that complete this form thoroughly and accurately are far less likely to face challenging questions later.

You'll need to gather technical input from your R&D team, financial data from your accounts, and organise everything into a clear, logical structure.

How do you explain your R&D projects?

HMRC wants to see the scientific or technological uncertainty you faced, not your business achievements. This is where many first-time claimants struggle. You're not writing a sales pitch; you're documenting genuine technical challenges.

Your Additional Information Form will ask you questions centring around the following three criteria:

What advance were you seeking?

Describe the scientific or technological improvement you were trying to achieve. This should be specific and measurable. Understanding what qualifies as an advance is crucial to framing your claim correctly.

What uncertainties did you face?

Explain what you didn't know at the start of the project. What made this technically challenging? Why couldn't you simply apply existing knowledge or methods? Scientific and technological uncertainty is at the heart of any qualifying project.

What did you do to resolve them?

Describe the technical work your team undertook. What experiments did you run? What approaches did you test? What did you learn?

Common mistakes first-time claimants make include being too vague ("we improved our software"), focusing on business benefits instead of technical challenges, and not explaining why existing solutions didn't work.

Here's the difference in practice:

• Weak: "Company A developed a new app with better features."
• Strong: "Company A needed to reduce database query times from 3 seconds to under 100ms while maintaining data accuracy across 50 million records. No existing framework could achieve this at their scale."

Think about it this way: if a competent professional in your field could have easily solved your problem using standard methods, it probably wasn't R&D. Your project doesn't need to be groundbreaking, but you do need to explain what made it technically challenging. Avoiding common pitfalls starts with clear, honest project descriptions.

What costs are eligible for R&D tax credits?

R&D tax relief covers specific cost categories. Understanding what qualifies (and what doesn't) prevents you from over-claiming or missing legitimate expenses. Mastering cost categories is essential for maximising your claim value.

Staff costs are typically your largest claim category. You can include:

• Salaries, employer National Insurance contributions, and pension contributions
• Only for time spent directly on R&D activities
• Proportional costs if someone splits their time between R&D and other work

If your developer spends 60% of their time on R&D, you can claim 60% of their employment costs. Our guide on how to claim for staff costs explains the documentation you'll need to support these calculations.

Consumable items include materials used and transformed during your R&D process, like prototype components, testing materials, or samples that get used up. This doesn't cover general office supplies or equipment that remains usable after your project ends.

Subcontractor costs can be claimed when you pay another company to perform R&D on your behalf. However, there are important rules to understand. If you're claiming under the RDEC scheme (for accounting periods beginning before 1 April 2024), subcontractor costs don’t qualify. For connected parties, you can claim 65% of the costs. Who can claim for subcontracted R&D depends on your scheme and relationship with the contractor.

Other qualifying costs include externally provided workers (EPWs) who work under your direction (and are treated much like subcontractors), clinical trial volunteers (for life sciences companies), and software costs including cloud computing and data licences directly attributable to your R&D work.

Capital equipment doesn't qualify, even if your R&D team uses it every day. This is one of the most common misunderstandings among first-time claimants.

How should you document your costs?

Documentation is your insurance policy against an HMRC enquiry. Without proper records, even legitimate R&D work can be challenged or rejected.

HMRC expects specific documentation for each cost category:

• Payroll records showing salaries, NICs, and pension contributions
• Timesheets or time allocation records demonstrating how much time staff spent on R&D
• Invoices and contracts for subcontractors, consumables, and other external costs

How should you organise it? Create a clear filing system with three layers:

1. By project – separate folders for each R&D initiative
2. By cost category – staff, materials, subcontractors clearly distinguished
3. Cross-referenced to your Additional Information Form – make it easy for HMRC to verify any figure you've claimed

Start documenting from day one of your accounting period. Don't wait until year-end to reconstruct what happened. One of our clients keeps a simple Google Sheet where developers log R&D hours weekly; it takes 5 minutes and saves hours at year-end. Create a similar system that works for your business, whether that's project management software, shared spreadsheets, or dedicated timesheets.

Keep project notes as you go, not six months later. When your team solves a technical problem, document what you tried and why. These contemporaneous notes are gold dust if HMRC ever asks you to demonstrate the uncertainty you faced. Essential evidence for a successful claim includes both financial records and technical documentation.

What is the deadline to make your claim?

First-time claimants need to track two separate deadlines. Miss either one and your claim is invalid.

The Advance Notification Form deadline: You must submit the ANF within six months following the end of your accounting period. If your accounting year ended 31 December 2024, you have until 30 June 2025 to submit your notification. There are no exceptions or extensions to this deadline.

The claim submission deadline: You have two years from your accounting period end to submit your R&D claim. Using the same example, if your year ended 31 December 2024, you have until 31 December 2026 to include the claim in either your original or amended Corporation Tax return.

The Additional Information Form must be submitted before your Corporation Tax return. Many companies submit their CT return first and forget to attach the AIF – this means that you’ll need to submit your AIF and resubmit your CT600 again.

How does your R&D tax credit deadline relate to your Corporation Tax deadline? You can include your R&D claim in your original CT return (due 12 months after your accounting period end), or in an amended return submitted later. Either way, the AIF must be attached when you submit.

Don't wait until the last minute. Preparing a compliant first-time claim is often a weeks-long process, especially if you need to gather documentation or clarify project details with your technical team. Many claimants start preparing 6 months before their deadline.

How do you submit your claim?

Submitting your R&D claim involves three main steps, each with its own requirements:

Step 1: Submit your Advance Notification Form
This happens first, through HMRC's online portal using your Government Gateway credentials. You'll receive confirmation once it's accepted.

Step 2: Prepare your Additional Information Form
Complete this detailed document with your project descriptions, cost breakdowns, and contact information. This gets submitted alongside your Corporation Tax return.

Step 3: Include your claim in your Corporation Tax return
Your R&D tax credit is claimed through your CT600 form, with the AIF attached as supporting documentation. The claim affects your Corporation Tax calculation, reducing your tax bill or creating a payable credit.

Who typically handles submission? You have three options:

• Submit it yourself if you're comfortable with Corporation Tax processes and R&D requirements
• Work with your accountant, who may already be familiar with R&D claims
• Engage an R&D tax advisor who specialises in these submissions

Common submission mistakes include forgetting to attach the AIF (your claim will be rejected), not keeping copies of your submission (you'll need these for your records in case of any problems), and calculation errors in apportioning costs or applying relief rates.

What happens after submission? HMRC typically takes 6-12 weeks to process straightforward claims. During this time, they may ask clarification questions or open a more formal enquiry if they spot inconsistencies. Always keep copies of everything you submit; if HMRC comes back with questions six months later, you'll need to refer to exactly what you claimed.

Get your first claim right

First-time claims involve more paperwork than they used to, but each requirement has a purpose – protecting both you and HMRC from errors, fraud, and misunderstandings. The new notification and documentation requirements mean you can't rush a last-minute submission.

Here's what matters most:

• Submit your ANF early – within six months of your accounting period end, with no exceptions
• Document as you go, not retrospectively – contemporaneous records carry far more weight with HMRC
• Start preparing months before your deadline – gathering evidence and writing project descriptions takes time

If you'd like help navigating your first R&D claim, Myriad's team of specialists can review your projects, calculate your qualifying costs, and help with the entire submission process. Get in touch for a free eligibility assessment.