FAQ

Advanced Clearance is a voluntary scheme where HMRC reviews your planned R&D project before you submit your tax relief claim. If approved, it provides certainty that HMRC agrees, in principle, that your planned activities meet the definition of R&D for tax relief purposes.

As it stands, the scheme has specific eligibility criteria:

• You must be a new claimant (making your first R&D claim).
• Your company must have a turnover of £2 million or less.

HMRC is currently consulting on the scheme because the current version has limitations and may not be fully "fit for purpose." They are exploring how to potentially improve it to provide greater certainty to more companies, enhance compliance, and better serve taxpayers and the tax advice market efficiently. Changes are being considered, but the final outcome isn't decided yet.

That seems to be a key area HMRC is exploring. Expanding eligibility to more (or potentially all) businesses seeking R&D relief is being considered. However, this would require changes to how HMRC processes applications to handle the increased volume.

The primary benefit is certainty. If HMRC grants Advanced Clearance for a project, they typically agree not to challenge the eligibility of that specific R&D work for tax relief purposes for up to three accounting periods (provided the project scope doesn't significantly change). This gives you valuable peace of mind.

You need to clearly outline your planned R&D project. This includes detailing:

• The scientific or technological baseline (what's already known).
• The specific scientific or technological uncertainties you aim to resolve.
• The advance in science or technology you are seeking.
• The technical challenges involved and why they aren't easily solvable.

It focuses on the nature of the work, not just the finances.

No, not directly. Advanced Clearance focuses on whether the planned activities qualify as R&D in principle. It does not pre-approve a specific monetary value for your claim. You still need to calculate your qualifying expenditure accurately and claim it through your corporation tax return later, following the standard rules.

Think of them as steps in potentially getting information to HMRC earlier. Advanced Clearance is the earliest possible step, providing certainty before significant work might even commence. Pre-Notification (required for some first-time or lapsed claimants) comes later, informing HMRC of the intention to claim within a specific timeframe. The AIF is submitted with the actual claim, providing detailed project and cost information after the accounting period.

Its limited eligibility meant many companies couldn't use it. Additionally, historical advisor fee models (like purely contingent fees) might have provided less incentive for some advisors to actively promote a scheme that granted multi-year certainty upfront.

Yes, absolutely. A knowledgeable R&D tax advisor can provide significant help in preparing a robust Advanced Clearance application, ensuring you clearly articulate the qualifying aspects of your planned R&D. It's crucial, however, to work with a reputable, regulated advisor to ensure compliance and quality advice.