Spring Budget R&D Tax update: R&D Advance Clearance

In the Spring Statement of March 2025, Chancellor Rachel Reeves announced proposed reforms to the UK’s £8 billion research and development (R&D) tax credit scheme. These reforms aim to address concerns about fraud and errors within the system and to improve accessibility for businesses. A key proposal is the potential introduction of mandatory advance assurances, requiring companies to confirm the eligibility of their projects for R&D tax credits before submitting claims. Currently, this advance assurance option is available but seldom utilised voluntarily.  

The consultation published on Wednesday 26th March seeks to enhance certainty for claimants and reduce fraudulent claims. The three goals of the consultation are: 

• Greater certainty on the eligibility of a company’s R&D claim 

• Enabling companies to better plan their R&D investment 

• Understand the options around voluntary and mandatory assurances 

The consultation closes on the 26th May 2025. 

Given the journey that R&D agents and companies have had with dealing with HMRC over the last two to three years, utilising a pre-approval process could make the process much easier. It may also make it a lot harder, with HMRC’s lack of a technical capability in assessing whether R&D that has been completed is R&D, to understand why proposed R&D in the future is R&D, when companies don’t have all the answers.

The existing R&D Advance Assurance process does not get used heavily because anecdotally HMRC were more likely to refuse you were going to be doing R&D than accept, so why apply?  TBAT Innovation have never suggested that companies proceed down the R&D Advance Assurance route for this very reason. TBAT will certainly be contributing to this consultation. 

If no further changes are made to the operation of the scheme and Advance Clearance becomes mandatory, then companies could have to justify their R&D claims up to three times: 

• R&D Advance Clearance 

• Pre-notification 

• R&D Additional Information Form 

Something has to be done to make the process easier for companies not harder.  

If anyone reading this has experience of the existing R&D Advance Assurance process, I would be happy to hear from you! Book a free 1-2-1 consultation.