R&D Advance Assurance Pilot

On 18 May 2026, HMRC launched a pilot of a new R&D tax relief Advance Assurance service. The pilot runs alongside the existing first-time-claimant scheme and is intended to give UK SMEs a written HMRC view on specific, high-risk aspects of an R&D claim before the Company Tax Return is filed.

For SMEs that have struggled with the increased compliance load of the merged R&D scheme (covered in our piece on the merged scheme two years in), the pilot is the first materially new HMRC tool aimed directly at de-risking claims since the merged scheme launched in April 2024.

This article covers what is in scope, who can apply, the 40 calendar day response target, where the pilot helps and where it does not, and the early professional reaction from R&D specialist firms.

Who this applies to

• UK SMEs planning to make an R&D tax relief claim under the merged scheme or Enhanced R&D Intensive Support (ERIS).
• Companies that have claimed before, not only first-time claimants.
• Companies anticipating a high-risk or high-value claim, or a claim with one of the specific issues the pilot covers.
• Agents acting for SMEs on R&D claims (applications can be made by the company or an authorised agent).

What is new compared with the existing scheme

The existing Advance Assurance scheme has been available since 2015, but is restricted to first-time claimants meeting strict size criteria. The new pilot widens eligibility substantially, narrows the scope of what can be assured, and applies a fixed response target.

Issue	Existing Advance Assurance scheme	2026 pilot
Eligibility	First-time claimants only, turnover under £2 million, fewer than 50 employees	Any SME planning to claim, regardless of claim history
Scope of assurance	The R&D activity overall	One or two of four specific issues per application
Sector approach	Open across sectors	Initial cap on applications, sector-based prioritisation
Target response time	None published	40 calendar days from a complete application
Right of appeal if refused	None	None
Cost	Free	Free
Status	In force, low uptake	Pilot, runs until May 2027

The pilot is voluntary. Companies cannot apply to both the existing scheme and the new pilot for the same claim period.

The four issues you can ask HMRC to address

Applications under the pilot must fall within one or two of the following four areas. These are the points HMRC has identified as the most common sources of complexity in current R&D claims.

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

The substantive test is unchanged: the work must seek to achieve an advance in science or technology by resolving scientific or technological uncertainty that a competent professional in the field could not readily deduce. The pilot allows a company to put a specific project to HMRC and receive a written view against the DSIT R&D guidelines before the claim is filed.

2. Whether overseas expenditure qualifies for relief

For accounting periods beginning on or after 1 April 2024, qualifying expenditure on Externally Provided Workers and subcontractors is generally limited to UK PAYE/NIC payments. Narrow exceptions exist where the geographical, environmental, social or regulatory conditions necessary for the R&D are not present in the UK. The pilot allows a company to put the specific overseas arrangement to HMRC and receive a written view on whether the exception applies.

3. Which party can claim relief for contracted-out expenditure

For accounting periods beginning on or after 1 April 2024, the merged scheme rules on contracted-out R&D moved the right to claim to the customer (the company that decides to undertake the R&D), rather than the contractor in most cases. The pilot allows the parties to a specific arrangement to put the contract to HMRC and receive a written view on who is entitled to claim.

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

The PAYE/NICs cap restricts the payable element of an SME R&D credit where the company has a limited UK payroll. An exemption exists for companies whose intellectual property is being developed in-house and where related-party subcontractor or EPW spend is below a defined threshold. The pilot allows a company to put its specific position to HMRC and receive a written view on whether the exemption applies.

The 40 calendar day target

HMRC has stated a target of a written response within 40 calendar days from a complete application. Where HMRC needs further information, the clock resets.

The 40 day target is a service standard, not a statutory deadline. Early professional commentary has flagged the question of whether HMRC will hold the target as application volume builds. The pilot is initially capped on volume and prioritised by sector, which is HMRC's stated mechanism for keeping the target manageable.

What the pilot does not do

A factual summary, not a complaint:

• The pilot does not reassure you on cost categorisation. Whether a particular cost line is correctly classified as staff, EPW, software, consumables or subcontractor remains a question for the Additional Information Form and the Company Tax Return.
• The pilot does not assure quantum. The amount of qualifying expenditure is not within scope.
• The pilot does not freeze HMRC's right to open an enquiry. If the facts presented at assurance turn out to differ materially from the facts in the eventual claim, the assurance does not bind HMRC.
• There is no right of appeal if HMRC refuses to give assurance under the pilot.

Worked scenario

A UK manufacturing SME with a 31 March 2027 year-end is preparing a £350,000 R&D claim. The company has one project at the boundary of the DSIT definition (a process improvement that may or may not amount to a scientific or technological advance) and a £40,000 spend on a European subcontractor that the company believes falls within the narrow overseas exception.

• The company applies to the pilot in June 2026 on issues 1 (R&D definition for the boundary project) and 2 (overseas exception for the European subcontractor spend).
• HMRC accepts the application on 1 July 2026.
• A written assurance issued on 9 August 2026 (39 calendar days).
• The company files the AIF in March 2027 and the CT600 in May 2027, reflecting the position HMRC assured.

If the facts in the AIF match the facts presented in the application, the assurance protects the position on those two specific issues against challenge.

Cost categorisation, quantum and other aspects of the £350,000 claim remain at risk in the usual way. The pilot reduced the company's enquiry risk on the two specific issues it was used for.

Early professional reaction

Reaction from R&D specialist firms and the broader tax adviser community has been cautiously positive. The most consistent observations:

• Welcomed: the widening of eligibility to all SMEs, not only first-time claimants, addresses a long-standing criticism of the existing scheme (which had under 1% uptake among eligible SMEs, with around 80 applications in 2023-24).
• Welcomed: a published response target of 40 calendar days is a meaningful improvement on the existing scheme's open-ended timeline.
• Cautious: the assurance is narrow (one or two specific issues per application, four issues in total). It does not cover quantum or cost categorisation, which are where many enquiries focus.
• Cautious: HMRC's caseworker capacity to evaluate technical R&D claims has been a long-running concern. Whether a pilot can deliver consistent technical decisions at scale is the open question.
• Cautious: early engagement with HMRC, while voluntary, puts the company on HMRC's radar. Some advisers see this as a positive (gets the claim a clean run) and some as a negative (increases the chance of further questions).
• Open: the no-right-of-appeal point is acceptable for a voluntary pilot, but raises the bar on getting the application right the first time.

The early professional consensus is that the pilot is worth using selectively, on the right kind of claim, rather than as a default step for every R&D filing.

Lexmore's View

The pilot is a useful new tool for a narrow but important set of cases. It is most valuable where:

• A specific project sits at the boundary of the DSIT definition, and the company would not file the claim with confidence in the absence of an HMRC view.
• A specific overseas arrangement may or may not fall within the narrow overseas exception, and the value of getting it right materially exceeds the cost of the assurance process.
• A specific contracted-out arrangement is novel, and the contractual position on who claims is unclear.
• A specific PAYE/NICs cap exemption is being relied on, and the company wants HMRC's view on the exemption point.

It is less valuable for routine claims where the activity, the cost categorisation and the documentation are well-established. In those cases, the application time is better spent on the Additional Information Form itself.

The 40 calendar day target is the right thing to watch. If HMRC holds it through the pilot period, the service becomes a real planning tool. If it slips, the assurance arrives after the period it was meant to inform, and the value falls sharply.

Clear scope. Clear evidence. Clear claim.

References

• Check if you can apply for advance assurance for your R&D tax relief claim | gov.uk
• R&D tax relief advance clearances government response | gov.uk
• Research and Development (R&D) tax relief: the merged scheme and enhanced R&D intensive support | gov.uk
• Submit detailed information before you claim R&D tax relief (Additional Information Form) | gov.uk
• Guidelines on the meaning of research and development for tax purposes (DSIT) | gov.uk
• HMRC Corporate Intangibles Research and Development Manual (CIRD) | gov.uk