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R&D advance assurance goes live

11th Jan 2016
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Small businesses turning over less than £2m and employing fewer than 50 people can now apply for advanced approval on R&D tax relief claims.

The ‘Making R&D Easier: HMRC’s plan for small business R&D tax relief’ publication contains details about the measure, which has been introduced in response to a consultation on R&D.

HMRC said the introduction will help small and medium-sized businesses put more effective financial planning in place and give them more certainty.

Advance assurance will be open to all companies whether they employ a tax adviser or not, and HMRC said applicants will have "assurance that HMRC will allow their first three years of R&D tax relief claims without further enquiry."

Originally announced at the Autumn Statement 2014 and then mentioned in the following Budget, the process of companies applying for government approval went live on 30 November.

Jennifer Tragner, a director at ForrestBrown, welcomed the news on advance assurance:

“It’s great to see HMRC take the lead and work towards raising awareness, ‘enabling work’ as they call it, and accepting that there are a large number of companies in the UK that aren’t claiming but should be," she told AccountingWEB. “They’re taking control of raising awareness of R&D relief and making it easier to claim.”

However Tragner warned the execution of advance assurance remains to be seen.

“Having looked at the website and form you use to apply for advance assurance, I’m concerned it will have the effect of making it easier as it pretty much requires you to do your claim and submit it for a pre-review.

“A lot of companies that aren’t well enough researched when they put their claim in will just get told ‘no, sorry you can’t claim’.”

The focus is on HMRC dealing with claimants directly, but accountants are still expected to play a significant part in the success of R&D tax relief claims.

HMRC is also expected to publish improved R&D guidance and templates later this year.

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18th Jan 2016 13:03

RD Assurance

The advance assurance facility is very welcome news for small companies wishing to file their own first claim for tax relief. Coupled with the April 2015 increase in the S.M.E. rates of relief and April 2014 increased tax credit rates, UK RD tax relief is almost back to its 2007 levels for loss making innovators.

All good news so what next? Perhaps a review of some of the underlying FA 98 (yes 18 year old this April) linked corporate tax legislation should follow soonest!


Tax Insight LLP

Tax for Innovative Companies

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