Getting Advance Assurance for R&D Tax Relief

If you're planning to claim R&D tax relief for the first time and want certainty that your claim will be accepted, you can apply for advance assurance from HMRC. This voluntary scheme lets you submit details of your research and development work in advance, and if HMRC agrees, they'll guarantee your claim will be accepted for your first three accounting periods — as long as you claim what you agreed.

What advance assurance is

Advance assurance is a voluntary service from HMRC that gives you confidence before making your first R&D tax relief claim. You submit details of your company's research and development activities, and HMRC reviews them to confirm whether they qualify for relief.

If HMRC agrees your work qualifies, you'll receive an 'advance assurance agreement'. This guarantees that your R&D tax relief claim will be accepted, provided it matches what you described in your application. The agreement covers your first three accounting periods only.

It's important to understand that getting advance assurance doesn't mean you've actually claimed the relief. You still need to make a formal claim through your Company Tax Return. The advance assurance simply gives you certainty that your claim will be accepted.

Who can apply

Advance assurance is only available to small and medium-sized enterprises (SMEs). You can apply if:

• You've never claimed R&D tax relief before
• Your company has a turnover below £2 million and fewer than 50 employees
• You're planning to carry out R&D work, or you've already done R&D work but haven't claimed relief yet
• You're part of a group of companies, and none of the linked companies have previously claimed R&D tax relief

Either you or your accountant (or other agent) can complete the application on your behalf.

Who cannot apply

You're not eligible for advance assurance if:

• Your company is large (exceeds the SME thresholds)
• You've entered into a Disclosable Tax Avoidance Scheme (DOTAS) — a tax arrangement that must be disclosed to HMRC
• You're a corporate serious defaulter — if this applies to you, HMRC will have written to tell you

What information you'll need

Before starting your application, gather the following:

• Your company accounts
• Company registration documents from Companies House
• Previous Company Tax Returns (if your company isn't new)
• Any HMRC correspondence about your advance assurance application
• The name of a main contact — such as a research manager or company director who has direct knowledge of your R&D work and can discuss the application with HMRC
• Basic company information
• Detailed descriptions of your R&D activities — you'll need to explain the scientific or technological uncertainties you faced and how you attempted to overcome them
• Cost information related to your R&D activities

The requirement to explain uncertainties is particularly important. R&D tax relief is based on whether you're working to resolve uncertainties that a competent professional in your field couldn't readily solve.

How to apply

The easiest way to apply is online. You'll need to sign in with your Government Gateway user ID and password. If you don't have one, you can create it when you first try to sign in.

If you cannot apply online, you can print and post the form instead. You have two options:

• Fill in the form online (without saving) and then print it
• Download the form to your computer using Adobe Reader, complete it, and print it

You cannot save your progress with the online form, so make sure you have all your information ready before you start.

Post the completed form to the address shown on the form itself. If you need an accessible format or if the form doesn't open, contact HMRC's online services helpdesk or email different.format@hmrc.gov.uk.

What happens after you apply

Once HMRC receives your application, they'll contact you by email to arrange a telephone call. During this call, they'll discuss your R&D activities in more detail. This is usually a short conversation, but more complex cases might require a longer discussion or even a visit to your company.

After this discussion, HMRC will send you a letter confirming whether your application was successful.

If you're granted advance assurance

HMRC will send you a letter explaining your responsibilities and what to do if your R&D activities change from what you described. They may also contact you after you submit your first claim on your Company Tax Return to verify it matches your advance assurance application.

If you're refused advance assurance

The letter will explain why your application was unsuccessful. You cannot appeal this decision or reapply for advance assurance. However, if you still believe your work qualifies for R&D tax relief, you can submit a claim through your Company Tax Return. HMRC will then review it through their normal processes.

Next steps

Even if you receive advance assurance, you must still notify HMRC that you intend to claim R&D tax relief by completing a claim notification form before you submit your Company Tax Return. This is a separate requirement that applies to all R&D claims, including those with advance assurance.

Remember that advance assurance simply provides certainty about eligibility — you still need to follow all the normal procedures to make your actual claim.

Sources

• Apply for advance assurance on a Research and Development (R&D) tax relief claim

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.