It is not necessary to restate (or re-file with amendments) previous accounts to claim research and development (R&D) tax credits. An R&D tax credit claim can be treated as a prior-year adjustment in the following period’s accounts. It is, however, worth noting that the accounting treatment for R&D tax credits differs depending on which scheme you are claiming under.
You can restate your previous accounts for R&D tax credits, but you don’t have to. In our experience, it would actually be very unusual to do so. Re-stating your accounts is only necessary when your accounts do not comply with the Companies Act. The Corporation Tax shown in your accounts is simply a provision, therefore any subsequent change to your liability generally does not require your accounts to be re-stated.
Typically, your accountant will simply include a prior-year adjustment in your next year’s accounts.
After you have submitted your first R&D tax credit claim, we can time the preparation of your next R&D claim to align with your accountant’s timelines for preparing your accounts and corporation tax return. This means we can reduce your tax liability ahead of the due date, securing you a cash-flow advantage.
Although the accounting treatment differs depending on which scheme you are claiming under, whether merged scheme or ERIS (enhanced R&D intensive support), you still don’t need to restate your previous accounts. Again, your accountant can include a prior-year adjustment in your next year’s accounts.
Find out more about the accounting treatment for R&D tax relief.
Here at ForrestBrown, we work closely with hundreds of accountants on behalf our clients to deliver a streamlined process and ensure the right adjustments are made at the right time.