HMRC launches new Advance Assurance Pilot for R&D tax relief
HMRC has launched the new Advance Assurance Pilot for Research & Development (R&D) tax relief claims.
The Advance Assurance Pilot allows eligible Small and Medium-sized Enterprises (SMEs) to seek advance assurance on up to two specific areas of an R&D tax relief claim.
A company can apply where it:
- is a small or medium-sized enterprise (SME)
- 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 they are requesting advance assurance for
- has not already received assurance on the 2 areas of their R&D work or project for the same period
The Advance Assurance Pilot is intended to provide certainty on particular complex or higher-risk aspects of an R&D claim. The areas currently covered are:
- whether a project meets the definition of R&D for tax purposes
- whether overseas expenditure qualifies for relief
- whether the company can claim R&D relief where work is contracted by one company to another
- Whether the company qualifies for exemption from the PAYE and NIC cap
Companies can request assurance on up to two areas in total, although each application can only cover one project and one area of relief. Separate applications are therefore required where assurance is sought on more than one area or project.
For more guidance, including what information you need to apply and how to apply, see HMRC Guidance ‘Apply for targeted advance assurance on up to 2 areas of your Research and Development (R&D) tax relief claim’
The existing full Advance Assurance scheme remains available. That service is generally aimed at SMEs making their first R&D claim and provides assurance over the full claim rather than selected areas. A company cannot apply for both the pilot and the full Advance Assurance for the same period.
If you have any feedback on your experience of using the Pilot that you would like to share with us, please email [email protected].