Advance Assurance

How to determine if you’re eligible

If you’re an SME, planning to do R&D (or have already done so) and haven’t submitted an R&D tax credits claim before, you can apply for Advance Assurance. If your business is part of a group, be sure that none of the linked companies has made a claim previously, as this will disqualify you.

How to apply

If your company qualifies for Advance Assurance, you can apply on the gov.uk website. However, as you’re new to the scheme you should be aware of the common mistakes many businesses make, which could lead your application to be rejected. Unfortunately, due to the diverse nature of eligible businesses, there is no ‘one size fits all’ approach, so it’s best to seek advice from an experienced adviser to be sure your application is granted.

Advantages

The advantage of Advance Assurance for small businesses is that it guarantees that your next three R&D claims will be approved. This will allow the business to budget these payments into any cashflow forecasts and be able to share this approval with investors. 

If you’d want to learn more, see whether your business is eligible and what expenses qualify for R&D.

Limitations

Advance Assurance assumes that the claimant business knows what level of spend will be dedicated to R&D over the next three years. Many businesses will have this set out in their plans, but three years is a long time and things can change. If the spend diverges significant from the approval submission or if the work pivots to something different this may lead to questions from HMRC. This does not negate the approval entirely, but it can mean the claim progresses more slowly than may have been expected. 

Even where a company has advance assurance the business will still have to submit a full R&D claim each year. Some businesses assume that no documentation is required and put the numbers into the tax return and expect a repayment. This is not feasible anymore and there will be claim preparation work required to support each of the claims across the three-year approval period. But having the approval in place allows a company to plan and be prepared for the submission process so this should ease the pain of preparing the claims.

How we can help

We’ve supported SMEs with their Advance Assurance application by getting to know their business and identifying how what they do applies to the HMRC guidelines. We then navigate applicants through each stage of the process ensuring they are confident and clear in their claims. This includes:

• Educating the business on the R&D tax credit rules and helping them to identify which of their projects are eligible.
• Sharing our knowledge of what expressions and writing styles are known to trigger concern with HMRC, to ensure the business avoids these in their claims.
• Speaking with an inspector can be intimidating, so we provide a dummy call to prepare the business for their phone call with HMRC (part of the application process), probing the business with questions we’ve developed from our 15 years’ experience of R&D claim submissions. 

Our tailored approach ensures that we provide you with the support you need and won’t charge for any extras that may not be relevant to you. If you are a member of an accelerator or trade body, we can offer a roundtable training service to minimise the initial outlay.

If you have any questions about Advance Assurance, or are just looking to get started, get in touch via the form below and our R&D experts will be in touch.