Consultation on advance clearances for R&D tax relief

The measure

Alongside the Spring Statement, HMRC launched a consultation into advance clearances for R&D tax relief, which was signalled in the corporate tax roadmap published at Autumn Budget 2024. 

Advance assurance in respect of R&D tax relief claims is currently available to first time claimants with turnover below £2 million and fewer than 50 employees. This has seen low and declining take-up with around 80 applications received in 2023 to 2024 out of approximately 11,500 eligible claimants. The consultation considers options for a new clearance scheme with the aim of reducing error and fraud, increasing certainty for customers, and improving customer experience. 

The consultation sets out options for voluntary assurance (potentially on a paid-for basis) as well as mandatory assurance targeted at claims with a higher risk of non-compliance. The consultation proposes focusing the voluntary clearances on growing and high potential companies as well as the eight focus sectors set out in the government’s industrial strategy.

Three stages at which a form of assurance may be useful are suggested: 

• Pre-activity: at an early stage, when research activity has not started or has only recently begun; 
• Pre-claim: when activity is well underway but before the claim is made; 
• Pre-payment: when a claim has been made but before payment. 

The consultation also considers the introduction of a minimum expenditure threshold to reduce the number of claims, addressing the higher levels of error and fraud in smaller claims and freeing up HMRC resources to carry out assurances. 

Who will be affected?

While the options outlined in the consultation are predominantly aimed at smaller companies and claims at higher risk of error and fraud, the government welcomes responses from businesses of all sizes who are claiming or intending to claim R&D tax relief, as well as advisers and other stakeholders.

When will the measure come into effect?

The consultation will run from 26 March 2025 to 26 May 2025.