Short answer
Changing your year end splits one set of accounts into two accounting periods, and almost every part of an R&D claim follows that split: two company tax returns, two additional information forms, and costs attributed to the period they were actually incurred in rather than spread evenly across the whole thing. Your claim notification deadline moves too — it follows the accounts, so extending a year end pushes it later and shortening one brings it forward. That single fact both saves years people think they have lost and loses years people think they still have.
Applies to
- Schemes
- Merged scheme · ERIS · Legacy SME · Legacy RDEC
- Periods
- 1 April 2023 onwards
- Claimants
- All
One set of accounts, two accounting periods
An accounting period for corporation tax can never be longer than twelve months. A period of account — the period your accounts are drawn up for — can be up to eighteen months, because company law allows an accounting reference period to be extended to that length, and no further.
So when you extend a year end, the two stop being the same thing. A company moving from a 31 December year-end to 31 March draws up one set of accounts covering the fifteen months from 1 January 2025 to 31 March 2026. For tax, that single period of account contains two accounting periods:
- the twelve months to 31 December 2025; and
- the three months to 31 March 2026.
A company tax return is due for each. Two CT600s, one set of accounts. That is the fact everything else in this entry follows from, and it is the one most often missed, because nothing about a single set of statutory accounts suggests two tax filings.
Shortening a year end does not split anything — a nine-month period of account is a single nine-month accounting period, and one return. But it moves the dates, which matters just as much.
Your notification deadline moves with the accounts
The claim notification deadline runs from the period of account, not from the accounting period. In the fifteen-month example, both accounting periods take the same notification window: it opens on 1 January 2025 and closes on 30 September 2026 — six months after the fifteen-month accounts end.
Counting from the old December year end gives 30 June 2026. That is three months too early, and getting it wrong in that direction is usually harmless. Getting it wrong the other way is not:
- An extension can revive a year you thought you had lost. If you were told in July 2026 that the year to 31 December 2025 was gone because the notification deadline had passed, and the accounts were then made up to 31 March 2026, the deadline had not passed. Check before writing off a year.
- Shortening brings the deadline forward. Move a 31 December year-end back to 30 September, and the accounts cover nine months, so the notification deadline is 31 March 2027 — three months earlier than the December date implies. Anyone working to the old date is late.
- The deadline is settled by a decision you may not control. The period of account is whatever the accounts are eventually made up for, and that is often decided months after the year has ended, by the accountant, for reasons unconnected with R&D. A company that expects to extend, lets 30 June pass on that basis, and then files to 31 December after all, has lost the year.
You do not need two notifications. Where one accounting period falls in the same period of account as another for which a notification has already been made, the second is exempt. In practice, we file for both anyway — HMRC’s form is built around a single accounting period, and the exemption is not something to rely on for the first time when a claim is refused. The full rule is in Do I have to tell HMRC before I claim R&D tax relief?.
Two returns, two information forms
Two accounting periods means two claims, and an additional information form attaches to a claim. Two forms. The accounting period dates on each must match the return it goes with, and each must be submitted before, or on the same day as, its own return.
What does not have to be duplicated is the thinking. The projects are the same projects, and the technical narratives can be word-for-word identical on both forms. Only the numbers change.
There is one sting in that. The rules on how many projects you must describe — and the requirement that the ones you choose account for at least half of the qualifying expenditure — are applied to each claim separately. A project that is a minor part of fifteen months can be the largest part of three, so the set of projects you have to write up for the stub period may not be the set you wrote up for the long one, even though the underlying story is the same.
Splitting the costs
Costs must be attributed to the accounting period they belong to. The default rule for apportioning anything between accounting periods is a time basis, but HMRC’s own guidance accepts that the figures may instead be computed by reference to the transactions that took place in each period where that gives a more accurate result.
For R&D expenditure it almost always does. R&D spend is lumpy and precisely dated — payroll runs, invoices, contractor payments — and a development push in the final quarter is exactly the sort of thing a time split gets wrong. Splitting a fifteen-month cost base twelve-to-three is a shortcut, not an apportionment, and where the records show when the money was actually spent, it is the wrong answer.
What a short accounting period does to the numbers
The stub period is a full accounting period with all the usual tests applied, and two of them behave differently at three months than at twelve.
- The PAYE and NIC cap shrinks. For accounting periods beginning on or after 1 April 2024, the cap on a payable credit is £20,000 plus 300% of the company’s relevant PAYE and NIC liabilities. Where the accounting period is shorter than twelve months, the £20,000 is proportionately reduced — so a three-month period gets £5,000. A small stub-period claim that would have been comfortably inside the cap over a full year can be capped.
- The intensity condition is decided on three months of trading. Enhanced R&D intensive support requires relevant R&D expenditure to be at least 30% of total relevant expenditure across the company and its connected companies, for accounting periods beginning on or after 1 April 2024. That ratio is worked out for each accounting period on its own. A concentrated burst of development in the stub can push a company over the threshold when the fifteen months as a whole would not, and a quiet quarter can push it under.
Both are worth modelling before the year end is changed, not after.
The claim deadline
The time limit for making the claim also runs from the period of account, so both accounting periods in the fifteen-month example share a deadline of two years from 31 March 2026. The twelve months to 31 December 2025 therefore gets fifteen months longer than its year-end would suggest.
The 42-month limit that applies to a period of account longer than eighteen months is close to unreachable in ordinary circumstances, because company law will not let an accounting reference period be extended past eighteen months. See How long do I have to make an R&D claim?.
Worked example
Illustrative. A company moves its year end from 31 December to 31 March, so its accounts cover the fifteen months from 1 January 2025 to 31 March 2026. That is two accounting periods. It spends £600,000 of qualifying expenditure across the fifteen months, but a development push ran from January to March 2026, so the spend is not evenly spread.
| Measure | 12 months to 31 Dec 2025 | 3 months to 31 Mar 2026 |
|---|---|---|
| Qualifying expenditure, on the actual records | £420,000 | £180,000 |
| Qualifying expenditure, time-apportioned 12:3 | £480,000 | £120,000 |
| Fixed element of the PAYE and NIC cap | £20,000 | £5,000 |
| Claim notification deadline | 30 September 2026 | 30 September 2026 |
| Claim deadline | 31 March 2028 | 31 March 2028 |
Two things stand out. The time-apportioned figures are wrong by £60,000 in each direction, which moves relief between two periods that may have very different tax positions. And the £20,000 buffer in the PAYE cap becomes £5,000 for the stub, which is where a small payable credit claim on three months of trading runs into a restriction that would never have arisen over a full year.
Both accounting periods share the same two dates, because both dates are set by the period of account. Neither of them is the 30 June 2026 that the old December year end would suggest.
Where claims go wrong
- Treating one set of accounts as one tax period. Fifteen months of accounts is two accounting periods and two company tax returns. Everything downstream — the claims, the forms, the cost schedules, the cap and intensity tests — doubles with them, and a claim prepared as though there were one period has to be taken apart and rebuilt.
- Time-apportioning the costs. Splitting a fifteen-month cost base twelve-to-three is quick and is almost never right. R&D spend is dated to the day by payroll and invoices, and where those records exist they are the better evidence of which period the expenditure belongs to. The error moves relief between periods, which matters whenever the two have different tax positions.
- Counting the notification deadline from the old year end. Six months from 31 December is not the deadline; six months from the end of the period of account is. Extending pushes it out, shortening pulls it in, and the direction of the mistake decides whether it is harmless or fatal.
- Writing off a year on a deadline that moved. A year to 31 December declared lost in July may still be claimable if the accounts were later made up to a later date. This is worth checking on every incoming client whose year end has changed, and it is the single most recoverable mistake in this entry.
- Forgetting that the £20,000 in the PAYE cap is pro-rated. On a three-month stub it is £5,000. A payable credit that was never going to be capped over twelve months can be capped over three, and the first anyone notices is when the payment arrives short.
- Filing one additional information form for both periods. Each claim needs its own, with accounting period dates matching its own return, submitted before that return. One form covering the whole period of account does not validate the second claim.
- Reusing the first period’s project selection on the second form. The relevant-projects test is applied to each claim separately, on that period’s expenditure. Three months can have a completely different shape from twelve.
John Mapother
Founder & Director
Last reviewed 1 September 2026