Advance assurance for R&D tax claims

Advance assurance for small companies that claim Research and Development (R&D) tax relief was introduced in November 2015. This measure makes it easier for small businesses investing in research and development to claim tax relief.

Advance assurance is available to companies who haven’t claimed R&D before, have an annual turnover of less than £2million and less than 50 employees. R&D credits are a Corporation Tax relief that were introduced to encourage innovation and enterprise within the UK economy. Small and medium-sized enterprise can claim R&D tax credits of 230% for expenditure incurred on or after 1 April 2015. There are different rules for large companies.

In order to apply for advance assurance, the company or agent needs to provide the following information to HMRC:

  • company accounts
  • company registration documents (from Companies House)
  • HMRC correspondence
  • previous company tax returns (not needed for new companies)
  • the name of a main contact with a direct knowledge of the R&D process.
  • basic company information
  • detailed information on company’s R&D activities.

Successful applicants for the scheme will receive confirmation that HMRC will not open any enquiries into their claims for the first three accounting periods. HMRC will also write to the business to confirm what changes can be made to R&D credits as part of an existing agreement.

Planning note:

The introduction of advance assurance by HMRC has helped and encouraged many small businesses to take the plunge and make R&D claims. Not having to worry that a valid claim will be rejected provides much needed security for smaller businesses making R&D claims.

If you feel that you may be able to claim we can help with the application process.

Source: HM Revenue & Customs | 09-05-2018

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