Advance assurance pilot confirmed
There have been a number of changes to how research and development tax credits are claimed in recent years. HMRC has now confirmed that a pilot of a new clearance procedure will begin later this year. What do we know so far?
Research and development (R&D) tax credits provide corporation tax relief for companies that incur expenditure undertaking qualifying activities. A number of new requirements have been introduced in recent years, including the need to notify HMRC of the intention to make a claim prior to making it. Following a consultation, HMRC has now confirmed that a new targeted advance assurance service will be piloted. Previously, a very restricted service, aimed at the smallest companies, has been available.
The service will aim to help provide confidence that a project will qualify for relief before a claim is made. The service will cover the following aspects:
- whether the project meets the definition of R&D for tax purposes
- whether overseas expenditure qualifies for relief
- which party can claim relief for contracted-out expenditure; and
- whether the company qualifies for exemption from the pay as you earn (PAYE) or National Insurance contribution cap.
There is no confirmed start date yet; the announcement in Agent Update 138 simply says it will be in Spring 2026.
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