The Advance Assurance Pilot & Your R&D Claims 

What do we know about the new Advance Assurance Pilot?

✅ What we know (Autumn 2025)

• The 2025 Autumn Budget announced a targeted Advance Assurance pilot for R&D tax relief.

• The pilot is scheduled to launch in Spring 2026 and will be open to any SME planning to claim R&D relief.

• This is not a full replacement for the existing arrangements, but a more accessible and “focused” assurance path. 

• The purpose is to give SMEs up-front confirmation … on key aspects of their R&D claims before submission, aiming to reduce disputes, accelerate claim processing and give companies more certainty.

• Four specific aspects will be available for advance assurance during the pilot - these were all identified from feedback from the earlier consultation on this topic. 

Why do R&D claims often trigger complexity and uncertainty?

1. Ambiguity in R&D definition and technical scope

• Under the merged R&D scheme (post-2024 reform), the definition of “qualifying R&D” remains technical and complex. It is dependent on whether the activity advances knowledge or capability in science or technology, involves uncertainty and requires systematic investigation. 

• Many projects — especially software, services, or hybrid software/hardware — straddle the line between routine development and genuine R&D, creating uncertainty.

2. Complex cost categories (outsourced, overseas, EPWs, NIC/PAYE cap)

• For example, costs for externally provided workers (EPWs), outsourced, or overseas R&D may be subject to restrictions or additional requirements under the merged scheme.

• Claims are also subject to a PAYE/NIC cap when a payable tax credit (cash payment) is being claimed.

• These cost and cap rules are non-trivial and often require careful accounting and documentation.

3. Administrative burden and procedural requirements

• The merged RDEC scheme requires proper documentation, including a claim notification (when required), completion of correct figures in the standard CT600 + an Additional Information Form (AIF) for each R&D claim period.

• Mistakes, omissions, or poor documentation increase the risk of delays, queries, or even denial — an issue more acute now given an enhanced compliance focus by HMRC.

4. Risk of disputes, delays, and compliance scrutiny

• HMRC has recently increased scrutiny of R&D claims espeically for SMEs, and particularly those claims that are borderline, involve complicated cost apportionment, overseas work, contracted-out R&D, or high R&D intensity in loss making SMEs.

• This leads to uncertainty for SMEs — in terms of whether the claim will be accepted, how long processing will take, and whether a claim might trigger an enquiry or even retrospective adjustments.

How the new Advance Assurance Pilot aims to address these complexities

Pre-submission clarity: SMEs should be able to obtain upfront confirmation from HMRC on key aspects of their planned R&D claim. For the pilot, applicants can seek assurance on one of the following four issues per application:

• • Whether the project meets the definition of R&D for tax purposes.

  • Whether overseas expenditure qualifies for relief.

  • Which party is able to claim relief for contracted-out expenditure.

  • Whether the company qualifies for exemption from the PAYE/NICs cap.

 This reduces the risk of surprises after submission.

• Reduced compliance risk and improved planning: With assurance before submission, businesses can plan resource allocation, budgeting, and cashflow more confidently — particularly helpful when investing significantly in R&D.

• Fewer disputes and faster claims: By resolving technical questions upfront, HMRC reduce the likelihood of post-submission queries or disallowance, which can delay refunds or lead to clawbacks. This encourages more SMEs to claim, including those previously deterred by complexity.

• Support for complex or high-risk claims: SMEs undertaking more ambitious or non-standard R&D (e.g. overseas collaborators, subcontractors, cutting-edge software or hardware development) will benefit from bespoke guidance and early sign-off, helping to bring such claims within reach.

But crucially, the success of the Advance Assurance Pilot and its eventual roll-out hinges on it being well managed and adequately resourced, particularly given that confidence in HMRC's current capacity and capability is at a very low ebb.

Why this matters now (and what SMEs should do)

Given the ongoing reforms (merged scheme, revised rules on overseas expenditure and contracted out R&D) — and the increased compliance risk — many SMEs may be hesitating to claim R&D tax relief despite eligible R&D activity. The Advance Assurance Pilot, by offering clarity and certainty, could significantly lower that barrier, encourage innovation investment and help SMEs leverage relief with less risk. 

Therefore my recommendation is that SMEs should prepare now by cataloguing their R&D projects, costs, contract arrangments and any overseas elements, to be ready to apply to be part of the pilot once it is open.

Visit Claiming RDEC Index Page for more info. on how to claim RDEC