HMRC has this additional Advanced Assurance option available to SMEs that are making their first R&D tax credit claim.
What does Advance Assurance mean to my claim?
If you successfully get Advance Assurance before you submit your first R&D tax credit claim, then it means that your first three accounting periods’ R&D tax credit claims will be accepted without the usual administrative process. You still submit the R&D tax credit claim at the correct time, but it is automatically accepted.
There are terms and conditions attached to this of course. You must stick to the parameters of your Advance Assurance discussions that are signed off by HMRC and you must claim within your first three accounting periods.
This is great news in terms of providing evidence and ticking off all the paperwork. It is also reassuring to know that you will have that guaranteed investment coming into your business.
Who is eligible for Advance Assurance?
- You are applying for R&D tax relief for the first time
- Your business is defined as an SME
- You are doing, have done or planning research and development projects.
You will not be eligible for Advance Assurance if:
- Your company is part of a group and one of these connected businesses has claimed R&D tax relief in the past.
- You are “a corporate serious defaulter”
- Your business is in a Disclosable Tax Avoidance Scheme
So, you’ve ticked all the eligibility boxes, now what?
You need to provide specific information to HMRC in order to make a successful claim for Advance Assurance. Essentially, HMRC need the information about your company that you would expect, like registration documents and accounts.
Then you will need to provide more in depth information about your specific R&D projects. This includes a named individual that is your company’s contact with HMRC about your Advance Assurance application. This means that they must be involved in the R&D process, can access current information and answer HMRC’s questions about the application.
Do I have to apply for Advance Assurance if this is my first R&D tax credit claim?
No, there is no directive requiring first time R&D tax relief applicants to request Advance Assurance. It is just an option that may be a good fit for your company.
How do I apply for Advance Assurance?
Unsurprisingly, there is an HMRC form for that. It can be completed either online, through your Government Gateway portal, or print and post it once you’ve filled it in onscreen. HMRC’s website gives you a helpful list of what you need to have to hand before you start filling it in. Word of warning, you can’t save the form and come back to it later unless you complete it using Adobe Reader.
You can complete the process yourself, or your tax agent or accountant can do it on your behalf.
What happens next?
HMRC will process your application and call to confirm any necessary facts. If you have a more complex situation, this may be quite a long conversation or HMRC may decide that it is more efficient to just come and visit you to clarify everything. The aim is to give HMRC everything they need on first application, so further enquiries are not necessary.
HMRC will notify you by post if your application is successful. This letter will give you further information about what to do if your R&D projects change over time and any further responsibilities regarding your Advance Assurance Status.