HMRC Consultations: What’s Open and What It Means for Businesses

Periodically, HMRC will release consultations on potential tax policy issues to gain a wider view of the topic. These consultations cover a range of areas, including business and personal tax, environmental levies, indirect taxes like VAT and stamp duties, and broader tax administration and compliance measures.

As of March 2025, there are two key consultations open for response, and both could have a significant impact on businesses and advisers:

• Enhancing HMRC’s ability to tackle tax advisers facilitating non-compliance 

• Research and Development tax relief advance clearances
  

Tackling Tax Advisers Facilitating Non-Compliance

This consultation looks at how HMRC can strengthen its ability to deal with tax advisers who promote or enable non-compliant behaviour.

It’s likely connected to the “Raising Standards in the Tax Advice Market” consultation from 2024, which focused on how tax advisers are regulated. Where “Raising Standards” is about building a better oversight framework, this newer consultation is about enforcement and giving HMRC the powers to take action.

Potential proposals include:

• Expanding HMRC’s enforcement powers

• Increasing penalties for advisers

• Publishing names of non-compliant tax advisers

• Sharing information with professional bodies

The reason this could be closely linked is that it focuses on giving HMRC the powers to tackle the tax advisers who push non-compliance. The “Raising standards” addresses how advisers are regulated and monitored, a necessary step before enforcement powers needed by HMRC can be effectively applied.

Advance Clearance for R&D Tax Relief

This second consultation revisits the Advance Assurance process, originally launched in 2015. This allows companies to voluntarily apply to HMRC with details of the company’s R&D work, before claiming R&D tax relief. HMRC will then assess whether the company qualifies for relief over the next three accounting periods. However, take-up has been low and seems to derive little benefit for companies that are planning to carry out R&D.

The scheme often doesn’t reduce admin and may even complicate the process:

• You still need to file a Pre-Claim Notification (as of April 2023)

• You still need to submit a detailed R&D report every year

The risk is that HMRC may disagree with your plans being genuine R&D or may find that the nature of the work has changed from the original submission. In either case, you’ll need to justify this to HMRC, adding to the administrative burden without providing clear benefits. For these reasons, R&D Advance Assurance has not been widely utilised.

So, what’s the goal of this consultation?

HMRC wants to explore whether a revised Advance Clearance model could:

• Reduce errors and fraud

• Improve certainty for businesses

• Enhance the overall experience of engaging with the R&D tax system

Would such a system deliver these aims, and what is the best way to design and operate such a system? This is in part aimed at business investment to give certainty about tax affairs with regard to major projects. 

Raising Standards in the Tax Advice Market

The following consultation was open in 2024: 

• Raising standards in the tax advice market: strengthening the regulatory framework and improving registration 

At present, the consultation on raising standards is at Stage 2 – Determining the best options and developing a framework for implementation, including detailed policy design. 

This consultation is particularly broad. It covers the entire tax advice sector, not just accountants, including firms offering specialist advice like R&D tax claims.

While no implementation timeline has been shared yet, the eventual outcome will likely involve:

• Drafting and introducing legislation

• Monitoring and enforcement

• A later review and evaluation of the impact

At TBAT Innovation, we’re actively taking steps to improve any accreditations and qualifications in this regard, to ensure we’re well-positioned to meet any new regulatory requirements.

What should businesses do?

• Tax advisors should stay updated on these consultations. Your compliance and reputation could be impacted.

• R&D-active companies should keep an eye on the Advance Clearance discussion. It could shape how you plan and claim relief in the future.

• Consider submitting feedback during the open consultation periods. It’s your chance to influence policy before it’s set in stone.

Do you need help understanding the HMRC consultations? Get in touch with our team today