Advance Assurance for R&D Tax Relief: The 2026 Targeted Pilot Explained

Advance assurance has historically seen very low take-up within the UK R&D tax relief regime, but that may now begin to change. Following consultation on whther a wider clearance model could reduce error and fraud while giving businesses more certainty, HMRC launched a new targeted advance assurance pilot in May 2026.

The current position

The existing advance assurance service is a voluntary scheme under which companies can submit details of their R&D activities before making a claim. HMRC will review the information provided and, where agreement is reached, confirm that the company’s R&D claims will be accepted, provided they are consistent with what was set out in the application. This agreement applies to the company’s first three accounting periods, although claims must still be submitted through the Corporation Tax return in the usual way.

Eligibility is tightly drawn. The claimant must be an SME, must be making its first R&D claim, must have turnover below £2 million and fewer than 50 employees, and must not be part of a group where another linked company has previously claimed R&D tax relief.

Why uptake has been so low

In principle, advance assurance should be attractive, particularly given HMRC’s increased compliance activity in recent years. A route to earlier certainty ought to have clear appeal.

In practice, however, uptake has been extremely low. HMRC’s consultation noted that only around 80 applications were received in 2023 to 2024, despite roughly 11,500 eligible businesses. This appears to reflect both the narrow eligibility criteria and a perception that the process is too burdensome relative to the benefit.

The consultation

The consultation ran from 26 March to 26 May 2025 and sought views on a range of possible reforms. It received 110 written responses from businesses, professional body members, tax practitioners and academics, alongside several industry roundtables.

Overall, the respondent profile appears to have been weighted toward advisers rather than claimant businesses alone, with a strong presence from accountancy, tax and specialist R&D advisory firms. At James Cowper Kreston, our response (summarised here) drew on direct client feedback and detailed discussions to ensure both adviser and claimant perspectives were reflected.

Several consistent themes emerged:

• Voluntary assurance was preferred, with limited support for a mandatory, risk-based model
• Pre-claim assurance was favoured; pre-activity suited more complex projects, while post-claim assurance was least supported
• Eligibility should be broader, with prioritisation based on clear factors (for example, first-time claims), not sector
• A minimum expenditure threshold divided opinion, with concerns it could exclude genuine smaller claimants
• Agents should be able to manage applications, subject to stronger oversight
• HMRC capability needs improvement, particularly technical expertise, guidance and communication

The 2026 targeted advance assurance pilot

HMRC has launched a pilot reflecting the consultation feedback, moving toward a more targeted and accessible model, with the pilot expected to run until May 2027.

The pilot allows eligible SMEs to seek HMRC’s view in advance on up to two specific areas of an R&D claim, rather than the claim as a whole. It is therefore an issue-specific process focused on complex or higher-risk areas, rather than a full clearance mechanism.

The areas covered are limited to those most commonly associated with uncertainty:

• whether a project meets the definition of R&D for tax purposes
• whether overseas expenditure qualifies
• which party is entitled to claim for contracted-out R&D
• whether the PAYE/NIC cap exemption applies

The pilot is open to SMEs that are carrying out, or planning to carry out, R&D and that have not yet submitted a claim for the relevant accounting period. Each application must relate to a single project and a single issue, with separate applications required for additional matters and a maximum of two applications permitted.

As part of the application, companies must provide information on the project, including an overview, forecast expenditure, the records maintained, and, where relevant, the basis for claiming overseas expenditure.

However, it is subject to a number of exclusions. It is not available:

• to large companies
• where assurance is sought on more than two areas
• where the company has applied for full claim advance assurance for the same period
• where there is an open enquiry, or certain compliance issues

HMRC has stated that it aims to process applications within approximately 40 days, subject to complete and accurate information, and may contact applicants for clarification. Decisions are confirmed in writing, with reasons provided where assurance is not granted. There is no right of appeal or reapplication, although a claim may still be submitted through the Corporation Tax return, taking HMRC’s position into account.

What this means for your business

For companies that meet the strict eligibility criteria, the existing advance assurance service remains the only route to full certainty. The pilot, by contrast, provides a more accessible but narrower form of assurance. Even where assurance is obtained on a particular issue, other aspects of the claim may still be subject to challenge.

More broadly, HMRC appears to have recognised that the current regime is too narrow to be widely useful. The pilot is therefore a meaningful step, although its practical effectiveness remains to be seen.

Rebecca Davis, R&D Tax Senior Manager, commented: “It’s encouraging that HMRC seems to be listening to what businesses and advisers have been saying about the need for more certainty. That said, how helpful this pilot proves to be will come down to how well it’s resourced, and how consistently it’s applied in practice. Whatever the outcome, advance assurance is not a substitute for a strong claim, which requires clear supporting evidence and robust, contemporaneous records from the outset of the R&D project.”

If you would like advice on whether the curent advance assurance scheme or the targeted pilot may be relevant to your business, get in touch with our team.