Tax experts at accountants PKF in Birmingham are warning that companies now only have until March 31 to make Research & Development tax relief claims that have backed up over the last few years.
And because of the complexity of the claim process it is essential that companies start work on the claims procedure immediately.
Tax partner Simon Littlejohns said: "Before changes in the rules, companies had a six-year time window in which to make claims for R&D tax relief.
"The new regulations mean that claims for financial years ending on or after March 31, 2006, must be made in the company's tax return.
"This effectively reduces the time limit for such claims to two years from the end of the accounting period to which the claims relates."
"This means, for example, that the time limit for making a claim for the period ended December 31, 2005, has been brought forward from December 31, 2011, to March 31, 2008," said Mr Littlejohns.
Companies eligible for R&D tax relief claims for any period ending between March 31, 2002, and March 31, 2006, need to get their claims in by March 31, 2008.
There is provision for claims to be made at a later date at the discretion of the tax inspector but PKF is advising that this should not be taken for granted.
"The preparation of R&D claims can be very time-consuming as all relevant costs need to be identified and descriptions of the R&D activity carried out must be written up.
"It is therefore vitally important that work is started as soon as possible in order to meet the deadline," he said.
R&D tax relief is available to any company carrying out scientific or technological development which leads to the solution of problems or advances in the relevant field of science or technology.
Mr Littlejohns said: "These activities are not confined to the so-called hi tech companies, such as those in the pharmaceutical industry. Any company could potentially qualify, such as those in the mining, construction and software development sectors.
"And the tax relief is not restricted to companies of a certain size, although the relief is more generous for small and medium sized enterprises and the minimum eligible R&D spend per 12 month period is £10,000."
He said that companies should urgently review their research and development activities since 2002 to assess whether any of these activities are eligible.