R&D tax relief advance clearances

Claims for Research and Development (R&D) tax relief can be highly beneficial for businesses, but making a valid claim can be complicated.

To help address this, HMRC has for many years offered an “advance assurance” mechanism to give businesses more certainty over their claims. However, uptake of the original advance assurance scheme was incredibly low - only around 80 applications were made in 2023/2024. The process can be difficult to use and did not offer full certainty to businesses.

Recognising this, the UK Government launched a consultation to explore implementing an improved clearance system and determine whether a system of clearances could effectively reduce error and fraud in R&D tax reliefs and provide businesses with greater certainty. Following the consultation, a pilot of the new Targeted Advance Assurance (TAA) scheme went live on 18 May 2026. The existing ‘full claim’ advance assurance system remains available to SMEs intending to claim R&D relief for the first time.
 

Targeted Advance Assurance

The new Targeted Advance Assurance (TAA) pilot service for R&D tax relief claims (also referred to by HMRC as the advance assurance pilot) confirmed that the service is intended to give eligible SMEs clarity on up to two specific complex or high-risk areas of an R&D tax relief claim before the claim is submitted. The pilot will run until May 2027.

The service is voluntary and available to companies that are SMEs, that are carrying out or planning to carry out R&D in the accounting period for which they are seeking assurance, have not yet claimed R&D tax relief for that period, and have not already received assurance from HMRC.

TAA is not available to large companies, companies seeking assurance on three or more areas, those that have applied for full claim advance assurance for the same period, or companies where they or a connected person has entered into DOTAS arrangements, been categorised as a Corporate Serious Defaulter, or has an open enquiry into a Corporation Tax return.

HMRC has confirmed that businesses can seek assurance on the following areas only:

  • Whether the project meets the definition of R&D for tax purposes
  • Whether overseas expenditure qualifies for relief
  • Whether they can claim R&D relief for work contracted by one company to another, and
  • Whether the company qualifies for exemption from the PAYE and NIC cap.

Each application can cover only one project and one area of R&D relief. Companies can make up to two applications, meaning that assurance on more than one project or area will require separate applications.
 

Interaction with the wider R&D compliance framework

It is important to note that TAA does not replace the standard R&D claim submission process. Even if your company successfully obtains TAA:

  • You must still prepare and submit a compliant R&D claim through its Company Tax Return
  • You will still be required to submit an Additional Information Form (AIF)
  • If applicable (e.g. first-time or claimants without a valid historic claim), you must file a Claim Notification Form within the statutory deadline.

TAA therefore provides limited pre-claim comfort on specific issues, rather than an approval of the overall claim.

If you are not granted assurance, there is no right of appeal. You can still submit a claim in relation to the area declined, although HMRC have stated that this will bring a significant risk of them opening an enquiry.
 

HMRC process and timelines

Applications for TAA are submitted via HMRC’s online process and require detailed technical and financial information at the outset.

HMRC will typically aim to respond within 40 days of receiving a complete application, although this depends on the quality and completeness of the information provided.

Businesses should therefore factor this timing into their claim preparation process, particularly if filing deadlines are approaching.
 

The benefits and challenges of the TAA scheme

In practice, we expect the service to be of limited use for many businesses. The scope is narrow, the service is restricted to SMEs, and assurance can only be obtained on up to two defined areas. It does not replace the need for a robust claim preparation process, nor does it provide a full clearance of the overall R&D claim.

For businesses already working with experienced R&D advisers, many of the issues covered by Targeted Advance Assurance should already be considered as part of the normal claim preparation process. At BDO, our standard R&D methodology is designed to identify and assess high-risk areas, including contracted-out R&D, overseas expenditure, PAYE/NIC cap issues and the technical eligibility of projects. This approach is aligned with HMRC’s wider compliance expectations and the increasingly rigorous standards applied to R&D claims.

In that context, Targeted Advance Assurance is likely to be most useful for risk-averse SMEs, first-time or less experienced claimants, and SMEs facing particularly complex or borderline issues where early HMRC input could influence whether and how a claim is made. It may also be helpful where there is uncertainty on newer legislative areas, such as the contracted-out R&D rules or restrictions on overseas expenditure.

If you are considering whether to use Targeted Advance Assurance, you should weigh the potential benefit of early certainty against the additional time and effort required to prepare the application. In many cases, a well-evidenced claim prepared under a robust governance framework may provide a more practical route than seeking assurance from HMRC on a narrow part of the claim.

If you have concerns over the eligibility of your R&D claim or would like to discuss whether Targeted Advance Assurance may be appropriate for your business, please contact james.rolfe@bdo.co.uk or romane.reeves@bdo.co.uk.