HMRC has launched a new targeted advance assurance pilot for research and development (R&D) tax relief. If your business is an SME, and you are planning to make an R&D claim, this may be an opportunity to secure HMRC's agreement on specific aspects of your claim before you submit it.

Here’s what you need to know – and how to decide whether to apply.

What the pilot does – and doesn’t – cover

The pilot, which launched in May 2026 and will run until May 2027, is free to use and voluntary. It sits alongside the existing advance assurance scheme, which remains open.

However, this pilot is not an extension of the existing advanced assurance scheme to all SMEs. Instead, it allows businesses to validate complex aspects of their claim.

Under the pilot, eligible SMEs can seek HMRC's confirmation on up to two aspects of a single R&D project, chosen from the following four areas:

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

• Whether overseas expenditure qualifies for relief

• Which party can claim relief where R&D work is contracted out

• Whether the company qualifies for exemption from the PAYE and National Insurance contributions cap

If HMRC agrees with your position on the aspects selected, you can proceed with your claim with greater confidence that those elements will not be challenged. However, assurance on two aspects does not bind HMRC in relation to the rest of your claim. HMRC may still raise an enquiry into any other aspect, and there is no right of appeal if assurance is refused. Additionally, the assurance only lasts for the duration of the project that was presented for review.

Importantly, the pilot does not review the costs to be included in the claim, and only one project can be covered per application.

Who should consider applying?

The pilot is designed to help businesses facing genuine uncertainty on specific, well-defined points. It is most likely to add value in the following situations:

If you are making your first R&D claim

If you have never claimed R&D relief before, it may not be immediately obvious whether your activities qualify. This is particularly common for businesses in sectors such as construction, professional services, financial services, or food and drink, where the boundaries of the statutory definition are less well understood than in sectors such as software or life sciences.

Pre-claim assurance on whether your activities qualify can give you a useful foundation before you commit time and resource to preparing the claim. However, businesses in this position should also consider whether the full advance assurance scheme for first-time claimants might be a better route.

If your R&D involves subcontracted or contracted-out work

The rules governing contracted-out R&D have been a consistent source of disagreement between businesses and HMRC. If your business engages third parties to carry out R&D on your behalf or performs R&D under contract for another party, it may not be straightforward to determine who has the right to claim. Seeking assurance on this point can prevent a difficult enquiry further down the line.

If you have overseas R&D costs

Following the reforms to qualifying expenditure introduced for accounting period beginning on or after 1 April 2024, overseas costs are only claimable in limited circumstances – broadly, where it would be wholly unreasonable to carry out the work in the UK.

If your business works with overseas contractors or research partners, confirming the position with HMRC before submission may be a sensible step if you believe the exemption might apply.

If you may be entitled to the PAYE and National Insurance contributions cap exemption

The cap can significantly reduce the cash credits available to companies with high R&D spend relative to their payroll costs. The exemption conditions are detailed and often misunderstood. If you believe your business qualifies – for example, because you have internationally mobile staff or make significant use of externally provided workers – advance assurance could help protect that position before the claim is filed.

What are the limitations?

It is worth being clear about what the pilot does not cover. It does not provide assurance over the whole claim, and it does not review the costs included in your claim. It is limited to one project and up to two complexity areas per application, with a maximum of two applications per year.

If HMRC refuses to provide assurance, there is no formal route of appeal. You can still proceed with the claim, although it is more likely to be questioned once submitted.

For businesses seeking assurance across their entire claim, the existing advance assurance scheme may still be worth considering, subject to its own limited eligibility criteria. If your business is a first-time claimant and an SME, this might be a better option, as it can provide assurance for three accounting periods.

In our view, companies with multiple projects, or projects that last for a relatively short period of time, might not benefit from this scheme. There is also a risk for companies that have already claimed for the same project in previous years. If HMRC refuses assurance, this could create a difficult position in relation to earlier submissions. Therefore, companies should take advice before making an application, and the application needs to be carefully considered and well-drafted.

What to do next

If you are an SME planning to make an R&D claim, and one of the four qualifying questions above applies to your circumstances, the pilot is worth considering. The service is free, and pre-claim certainty on a genuinely uncertain point can reduce the risk of a time-consuming HMRC enquiry later.

Our specialist R&D tax team can help you assess whether your activities qualify and whether applying for advance assurance makes sense for your business. We can also prepare and review your claim to ensure it is as robust as possible, whether or not you choose to use the pilot.

To discuss your position, please get in touch with us using the form below to speak to a member of our R&D tax team.