Advance Assurance – is it really necessary?
In November 2015 the Government introduced ‘Advance Assurance’ to assist SMEs claim R&D tax relief.
Simply put, Advance Assurance is a scheme for companies that qualify for R&D tax relief. A company must fill out a form on HMRC’s website and submit company details and information about the R&D activities.
Once HMRC receives the form they then contact the company to discuss R&D activities in more detail. However, many complex cases could take longer and HMRC may need to visit your premises.
Advance Assurance is intended to remove perceived barriers that previously prevented small companies from submitting R&D tax relief claims. Once Advanced Assurance is granted, companies may be able to submit claims for up to three accountancy periods without further HMRC involvement, or the threat of enquiry (potentially).
To meet the criteria for Advance Assurance a business must:
- no previous claim for R&D tax relief has been made
- annual company turnover is £2 million or less
- the company has less than 50 employees
- Is only available to incorporated businesses (companies)
Companies who are applying for Advance Assurance must still follow guidelines from BIS (Department for Business, Innovation and Skills). Companies applying for Advanced Assurance would still have to submit evidence of R&D projects and qualifying costs.
It’s not essential that companies apply for Advance Assurance before submitting an R&D claim.
To apply for Advance Assurance your company will need to provide detailed information to HMRC about your R&D activities along with accounts, tax returns, and company registration documents.
Companies can claim Advanced Assurance without the help of an experienced R&D tax relief advisor, but in order to maximise the claim, reduce errors and expedite the claim we strongly recommend taking advice from an R&D tax relief advisor.
Whatever your circumstances if you’ve been incurring costs developing new products or processes contact James Greenhalgh and his team to find out more about R&D tax relief.
This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.
The information was correct at time of publishing but may now be out of date.