HMRC has a scheme – the advance assurance service – where businesses can check aspects of a Research & Development (R&D) tax relief claim, before claiming it in a Corporation Tax Return.
Advance assurance is a voluntary service that allows you to send HMRC details of your company’s R&D work.
Choose the right advance assurance service
Before you apply, make sure you choose the right assurance service for your company, and that you meet the relevant criteria to use it. A company cannot apply under both services for the same period or project.
There are two types of advance assurance. You can choose either:
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- the existing full claim advance assurance service for first-time claimants who want to know whether their claim will be accepted, or
- a new targeted advance assurance service for projects that are seeking clarification on specific high-risk areas for which assurance is being requested.
1. Full claim advance assurance
HMRC provides a full claim advance assurance service to SMEs claiming R&D relief for the first time. This service covers the entire claim, and the advance assurance agreement is granted for the first 3 accounting periods only.
Who can apply:
– first-time claimants
Area of assurance:
– will my claim be accepted?
2. Targeted advance assurance
HMRC has introduced a targeted advance assurance service for eligible small or medium-sized enterprises (SMEs) to help answer queries on specific complex or high-risk areas of an R&D tax relief claim, before a claim is made.
A company can make up to two applications for assurance under this scheme. Each application can only include one project, and one area of assurance. If you want assurance on another project or area, you will need to submit a separate application.
This pilot scheme will run until May 2027.
Who can apply:
– a small or medium-sized enterprise (SME),
– that is carrying out R&D, or is planning to carry out R&D in the accounting period assurance is being requested for,
– has not yet claimed R&D tax relief for the period you are requesting advance assurance for,
– has not already received assurance on the two areas of your R&D work or project for the same period.
Areas of assurance:
– does the project meet the definition of R&D?
– does overseas expenditure qualify for relief?
– can R&D relief be claimed where work is contracted by one company to another?
– find out whether the company qualifies for exemption from the PAYE & NIC contributions cap.
Further information
We’re here to help with specific queries. Our team can assess your position, and then follow up with a way forward.