In November 2015 HMRC introduced Advance Assurance for companies that are claiming or aim to claim Research and Development (R&D) tax relief.
If your company carries out R&D for itself and/or other companies, and don’t forget this covers a very broad spectrum, you could qualify for Advance Assurance. What this means is that for the first three accounting periods of claiming for the tax relief, HMRC will allow the claim without further enquiries.
If you wish to apply for Advance Assurance please note that it is voluntary and you can apply at any point before your first claim for R&D tax relief.
HMRC said the introduction will help small and medium-sized businesses put more effective financial planning in place and give them more certainty.
If you apply for Advance Assurance, HMRC will allocate a specialist to help you understand and comply with the R&D tax relief conditions.
If you are successful and are given Advance Assurance, you are then free to concentrate on your business, rather than worrying about the requirements of your R&D tax claim.
Advance Assurance provides proof to HMRC that your company is eligible for R&D tax relief. This may also help you access some of the funding that is available innovation, which is separate to the tax relief already identified.
Your company can apply for Advance Assurance if it’s planning to carry out, or has previously carried out R&D. Your company will need to meet certain conditions which are:
Most people know this straight off so the first step is quite easy.
However, if your company is new, you can still apply, as long as you haven’t claimed R&D tax relief before. Don’t forget,as a new company there may also be funding available to support your new development.
If your company meets the above criteria, but is part of a larger group, you may still be able to apply and our experts will help you examine this situation.
If your R&D projects are still to be undertaken, HMRC will contact you after you’ve submitted your first claim (usually at the end of that financial year). This is to check that the work you proposed for Advance Assurance matches what you have done.
Agents, such as your accountant, can apply for Advance Assurance on your company’s behalf.
When HMRC contacts you to discuss your application, they will however need to talk to a company director or an employee (for example, research manager), but your agent will still be able to contribute.