HMRC R&D targeted advance assurance: what you need to know

HMRC has introduced a new R&D targeted advance assurance service as a pilot, giving eligible small and medium-sized enterprises (SMEs) greater clarity on specific complex or high-risk areas before they submit an R&D tax relief claim.

The pilot launched on 18 May 2026 and will run for 12 months until May 2027. It follows HMRC’s consultation on R&D tax relief advance clearance reform, which considered how a more accessible advance clearance system could provide greater certainty for businesses while helping to reduce error and fraud within R&D tax relief claims.

HMRC has confirmed that companies can make up to two applications for targeted advance assurance. Each application can only cover one project and one area of R&D relief. A company will therefore need to submit a separate application if it wants assurance on another project or area.

Importantly, unlike the full claim advance assurance service, companies that have previously claimed R&D tax relief may still be eligible to use targeted advance assurance.

What is R&D targeted advance assurance?

The service is voluntary and free to use. It allows eligible SMEs to seek HMRC’s view on specific aspects of a proposed R&D claim but does not replace the normal process for making an R&D tax relief claim or the associated filing requirements.

For businesses facing uncertainty over a complex or potentially high-risk area, targeted advance assurance could help them make a more informed decision before committing the time and cost involved in preparing a full R&D claim and supporting report.

Who can apply for R&D targeted advance assurance?

The targeted advance assurance service is only available to SMEs.

A company must be carrying out, or planning to carry out, qualifying R&D activities during the accounting period covered by the assurance application. It must not have already claimed R&D tax relief for that period.

The company must also not have already received assurance on two areas of its R&D work or project for the same period.

There are additional exclusions. For example, large companies or companies seeking assurance on three or more areas of an R&D claim cannot use targeted advance assurance. A company also cannot use targeted advance assurance if it has applied for full claim advance assurance for the same period.

What areas of an R&D claim can you get assurance on?

HMRC currently allows businesses to request targeted advance assurance on four specific areas.

The first is whether a project meets the definition of R&D for tax purposes. This could be particularly useful where a business is uncertain whether a project seeking an advance in science or technology meets HMRC’s qualifying conditions.

Assurance can also cover whether overseas expenditure qualifies for relief. Changes to the R&D rules have introduced greater restrictions around overseas expenditure, making this an important consideration for businesses using international resources.

A company can also seek assurance over whether it can claim R&D relief when it contracts R&D work to another company. The rules surrounding contracted-out R&D have changed significantly under the merged R&D regime and can require careful consideration of which company is entitled to claim.

Finally, businesses can seek assurance over whether they qualify for an exemption from the PAYE and National Insurance contributions cap.

These areas reflect some of the more complex aspects of the current R&D tax relief rules following the introduction of the merged R&D scheme.

How to apply for R&D targeted advance assurance

An agent, R&D adviser or an officer within the company can submit an application. Where an agent applies on behalf of a company, they will need the appropriate HMRC authorisation.

What information will HMRC require?

Companies will need to provide their Company Registration Number (CRN), the start date of the project and contact details for the relevant people within the business. This includes details of the competent professional and a senior officer within the company.

HMRC will also require an overview of the project, the start date of the accounting period for which the company intends to make the R&D claim, forecast expenditure and the expected duration of the project. The company will also need to provide details of the records it holds.

Where a company is seeking assurance over overseas expenditure, it will need to provide information explaining why it believes that expenditure qualifies.

It is important to provide complete and accurate information. HMRC may reject an assurance request if the company does not provide the information needed to assess the application.

What happens after you apply?

HMRC aims to process targeted advance assurance applications within 40 calendar days, provided the company supplies full and accurate information. However, if HMRC requires further information or clarification before reaching a decision, the process may take longer.

If HMRC grants advance assurance, the company will receive a letter confirming the decision based on the information supplied. This will also explain the company’s responsibilities and what happens if its R&D activities subsequently change.

If HMRC does not grant assurance, it will explain its reasons. There is no right of appeal against the decision, and the company cannot apply again for advance assurance on the same area.

However, a refusal does not necessarily prevent the company from making an R&D tax relief claim. If the company still considers that it qualifies, it can submit a claim through its Company Tax Return, although the company should carefully consider HMRC’s reasons before doing so.

Who could benefit from targeted advance assurance?

Over recent years, HMRC has increased its scrutiny of R&D tax relief claims following concerns about historic error and abuse within the schemes. This increased scrutiny, combined with significant changes to the R&D rules, has created greater uncertainty for some SMEs considering whether to make a claim.

Preparing an R&D claim can involve significant time and cost. Combined with the possibility of an HMRC review or enquiry, this can leave some businesses questioning whether pursuing a claim is commercially worthwhile.

The position can become even more complex where there is uncertainty over whether a project qualifies for R&D tax relief or how the rules apply to areas such as overseas expenditure and contracted-out R&D.

Targeted advance assurance could therefore provide SMEs with greater clarity on a particular aspect of a project before undertaking the expense of preparing a full R&D claim and supporting documentation.

However, they should not necessarily view advance assurance as a requirement for every R&D claim. They should consider the complexity of the project, the area of uncertainty and the potential value of the claim before deciding whether an application is appropriate.

Targeted advance assurance vs full claim advance assurance

It is important to distinguish the new targeted advance assurance pilot from HMRC’s existing full claim advance assurance service.

Targeted advance assurance focuses on specific complex or high-risk areas of an R&D claim. Companies that have previously claimed R&D tax relief can potentially use the targeted service, provided they meet the eligibility requirements.

Eligible SMEs preparing to make their first R&D tax relief claim can apply for full claim advance assurance. If HMRC grants it, the assurance can cover the company’s first three accounting periods.

A company cannot apply for both targeted advance assurance and full claim advance assurance for the same accounting period.

How Rayner Essex can help with R&D targeted advance assurance

The R&D tax relief landscape has changed significantly in recent years. The introduction of the merged scheme, revised rules for contracted-out R&D and restrictions on overseas expenditure mean businesses need to consider both the technical eligibility of their projects and the expenditure included within a claim.

Our R&D tax relief specialists can review your proposed R&D activities and help identify areas where targeted advance assurance may provide greater clarity before you prepare your full claim.

We can also help determine whether your projects meet the R&D qualifying criteria, review potentially qualifying expenditure and advise on more complex areas such as contracted-out R&D and overseas costs.

Where targeted advance assurance is appropriate, we can support you through the application process and help present the relevant project and technical information clearly to HMRC.

Whether you are considering an R&D claim for the first time or have claimed R&D tax relief previously, speak to our R&D tax specialists to discuss your project and determine the most appropriate approach today.