UK and International Tax news

R & D Advance Assurance Pilot

Friday 19th December 2025

HMRC have confirmed in Agent Update 138 that from Spring 2026 they will pilot a targeted R&D advance assurance service for all small and medium-sized enterprises planning to claim R&D relief.

The service will enable SMEs to gain clarity on key aspects of their R&D tax relief claims before submitting to HMRC.

Applicants will be able to seek assurance on one of four issues during the pilot.

These issues have been chosen from stakeholder feedback as the most complex or high-risk aspects of an R&D claim:

  • 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
  • whether the company qualifies for exemption from the PAYE or National Insurance contribution cap

HMRC will set out further detail in due course.

HMRC have also confirmed that while the pilot runs, the existing advance assurance offer will continue.

In recent years, the level of non-compliance in R&D tax reliefs schemes has been unacceptable and proportionate steps to reduce the levels of error and fraud are needed . HMRC’s Annual Report and Accounts 2024 to 2025 published in July 2025 set out the latest error and fraud estimates. The report showed a £578 million reduction in the level of non-compliance in 2022 to 2023, following the changes implemented by HMRC, compared to the 2021 to 2022 estimate.

The government also recognises the concerns raised by stakeholders about HMRC’s increased scrutiny of R&D claims, and more widely on administration of the reliefs. Whilst action to address error and fraud should be taken, the government is committed to improving administration to ensure the reliefs continue to support the most innovative businesses.

At Spring Statement 2025, the government published a consultation exploring options for widening the use of advance clearances in the reliefs to help further reduce error and fraud, while also improving the customer experience and providing certainty to businesses. The aims of the consultation were to explore options to reduce error and fraud, provide certainty to businesses and improve taxpayer experience. The consultation included 30 questions seeking views across the following areas:

  • the current advance assurance system, its effectiveness and areas for improvement
  • design and delivery of a future clearance system, including whether the system should be voluntary or mandatory, who should be eligible, how it could be delivered and when in the claims process a clearance might be issued

The consultation ran from 26 March to 26 May 2025 and a summary of responses has been published.

If you would like more detail on the above, please contact Keith Rushen on 0207 486 2378.

 

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