HM Revenue & Customs (HMRC) has launched a new targeted advance assurance service for Research & Development (R&D) tax relief claims.
Originally announced in the Autumn Budget 2025, the new pilot scheme is designed to help businesses gain greater certainty on complex or higher-risk aspects of R&D tax relief before making a formal claim.
The service is aimed particularly at small and medium-sized enterprises (SMEs) and will run as a pilot until May 2027.
What Is Targeted Advance Assurance?
The new targeted advance assurance service allows eligible companies to seek HMRC’s view on specific aspects of an R&D project before submitting their tax relief claim.
The goal is to reduce uncertainty and help businesses avoid problems later in the claims process.
This new service will run alongside HMRC’s existing full claim advance assurance process.
How Is It Different From Full Claim Advance Assurance?
The existing full claim advance assurance service:
- Is limited to first-time R&D claimants
- Covers an entire claim
By comparison, the new targeted service:
- Is open to eligible SMEs, even if they have claimed before
- Focuses only on selected areas of uncertainty
- Provides assurance on specific technical points rather than the whole claim
HMRC hopes the pilot will help determine which parts of the service are most useful to businesses.
What Can Businesses Seek Assurance On?
Under the new targeted advance assurance scheme, companies can request guidance on areas such as:
Whether a Project Qualifies as R&D
HMRC can provide clarity on whether work meets the definition of R&D for tax purposes.
Overseas Expenditure
Businesses can seek assurance on whether overseas R&D costs qualify for relief.
Contracted R&D Work
The service can help determine whether relief applies where one company carries out R&D work for another.
PAYE and NIC Cap Exemptions
Companies can ask whether exemptions from the PAYE and National Insurance contributions cap may apply.
Important Limitations
The targeted service has some restrictions businesses should be aware of.
Applications are limited to:
- One project per application
- One specific area of R&D relief per application
- A maximum of two areas of assurance for the same project or accounting period
If a company wants assurance on another project or issue, a separate application will need to be submitted.
It is also important to remember that advance assurance is not the same as making an R&D claim.
Businesses will still need to submit their formal claim through the normal process.
Why This Matters for SMEs
R&D tax relief can provide valuable support for innovative businesses, but the rules are often complex.
Areas such as:
- Qualifying activities
- Overseas expenditure
- Subcontracted work
- Staffing rules
can create uncertainty for companies preparing claims.
The targeted advance assurance service may help businesses:
- Reduce uncertainty
- Improve confidence in claims
- Avoid disputes later in the process
- Better understand HMRC’s interpretation of complex rules
Final Thoughts
The introduction of targeted advance assurance reflects HMRC’s continued focus on improving compliance and clarity within the R&D tax relief system.
For eligible SMEs, the pilot scheme may provide a useful opportunity to gain reassurance on more technical aspects of an R&D claim before submission.
If you would like advice on R&D tax relief, eligibility or whether targeted advance assurance could benefit your business, we would be happy to help.
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📧 info@ojwassociates.co.uk
