R&D Advance Assurance
If you are an innovative business then there could be potential for you making a claim for research and development (R&D) tax relief. Please see our Factsheet for further details on this and who can claim.
If you believe your activities qualify for R&D then you may want to proceed with a claim as follows:
- Ask a specialist R&D advisor to make the claim for you.
- Obtain Advance Assurance directly from HMRC and if accepted we can prepare the calculation for you.
A specialist R&D advisor should have the technical knowledge of your sector to able to communicate to HMRC why R&D is available to your particular situation. Our specialities fall elsewhere and so we require Advance Assurance from HMRC before we can assist with a claim.
Our fees are likely to be less than an R&D specialist as we are only dealing with the tax calculation side of the claim. So obtaining the Advanced Assurance may be a good alternative for a company if the claim is only going to be relatively small.
Advance Assurance is used to give companies a guarantee that any R&D claims will be accepted if they are:
- in line with what was discussed and agreed
- claimed within three years of the advance assurance.
To apply for Advance Assurance you will to complete the following form which involves answering the question outlined below.
Once HMRC have reviewed your application they will contact you, usually be a short phone call but sometimes a visit if the case is more complex, to talk about your R&D in more detail. They will then send a letter to confirm if the application was successful.
Advance Assurance Questions (answer each one in no more than 2500 characters)
- What is the proposed R&D activity the company plans to undertake?
Provide a short paragraph that concentrates on the R&D activity. It is important to convey the scientific or technological nature of what the company is doing or plans to do, not its commercial context.
This should be a specific project for example, something you have specifically set out to achieve, not something you’ve come across during normal day-to-day activity that you want to claim for retrospectively as a project.
- What is the scientific or technological advance being sought?
Provide a detailed explanation of the information given in the question ‘What is the proposed R&D activity the company plans to undertake?’
State what the advance is and why it is an advance (in the eyes of a competent industry professional).
- What are the scientific or technological uncertainties involved in the project(s)?
Provide evidence showing the project’s aim to address a scientific or technological uncertainty. This includes:
- where it is uncertain whether something is scientifically possible or technologically feasible
- situations where a competent professional working in the field is uncertain, on the basis of current knowledge, how to achieve in
practice the scientific or technological advance that is being sought
- situations where something has been established as scientifically possible, but there is an uncertainty about how to turn that theoretical knowledge into a cost-effective, reliable and reproducible process, product or service.
- How does the project plan to deal with these uncertainties?
Provide evidence that the company has a plan to deal with the uncertainty. Include:
- how the company has made a distinction between the wider commercial project and the R&D project
- what the uncertainties were, when they started and ended
- a description of the methods used to overcome the uncertainties, the investigations and analysis undertaken.
- Why is the knowledge being sought not readily deducible by a competent professional?
Provide the reason why the answer to the problem is not known using the current state of knowledge.
Note: scientific and technological activity that involves a review of the field by a qualified professional, or which involves applying known techniques to find the answer to a problem, is not R&D. Nor does R&D occur where the knowledge is new to the company but not new to the wider world.
- Please provide a breakdown of the expected R&D costs
There are certain costs that qualify for R&D tax relief. For more information follow the link below.
If after reading the guidance you’re still not sure, insert your R&D costs and HMRC will help you to work out what qualifies.