What is Research and Development (R&D) Advance Assurance? How can I apply? What are the conditions? What are the benefits?
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What is Research and Development (R&D) Advance Assurance?
HMRC offers an Advance Assurance service for companies seeking to claim Research and Development (R&D) tax relief. This service provides companies with confirmation that their activities qualify as Research and Development.
If advance assurance is granted, HMRC will not enquire into R&D tax claims made in the first three accounting periods as long as they are in line with what was agreed with HMRC.
This is part of HMRC's programme to make R&D easier and more accessible to small businesses. For our summary of HMRC's administrative framework see Making R&D easier.
Who can apply for R&D Advance Assurance?
A company can apply for Advance Assurance if it:
- Has not claimed R&D tax relief before.
- Has an annual turnover of £2 million or less.
- Has fewer than 50 employees.
A company cannot apply for Advance Assurance if it:
- Is part of a group that has already made an R&D tax relief claim.
- Has entered into a Disclosure Of Tax Avoidance Schemes (DOTAS) scheme.
- Is a corporate serious defaulter.
How to apply for R&D Advance Assurance?
The application for Advance Assurance can be made:
- Online (via the Government Gateway login).
- Using form CT R&D (AA) (only available online) which once completed on-screen, can be posted to HMRC.
The Advance Assurance application can be made by a representative of a company or by an agent acting on behalf of the company.
After requesting any additional information they need, or discussing the company's activities in more detail with an individual nominated by the company, HMRC will either send an agreement letter setting out the company's responsibilities and granting Advance Assurance for three accounting periods, or a letter advising the reasons why Advance Assurance is not being granted.
The application is voluntary and can be made before or after the R&D activity has already begun.
For information on how to make an R&D claim, please see Research & Development Tax Reliefs, How to claim relief
Useful guides on this topic
Research & Development Tax Reliefs
What is R&D Relief? How does it work? Why does the size of the company matter? What is sub-contracted R&D? How do I write an R&D Report?
R&D: SME Tax Credit scheme
What Research & Development (R&D) schemes are available for small and medium sized companies undertaking R&D? How to make an R&D claim? What are the qualifying costs and how much can be claimed?
R&D: 'Large Company' Scheme (RDEC) Guide
What is the R&D Expenditure Credit (RDEC) Large Company Scheme for R&D relief? How does it work?
