HMRC launches new R&D advance assurance process
HMRC has introduced a new advance assurance process for research and development (R&D) tax relief claims, aimed at giving eligible companies greater certainty before submitting a claim. What does the new process involve?
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Accounting for VAT if there is no cash payment
Your business has submitted repayment returns for the last two quarters and you are concerned that you might have underpaid output tax on some supplies where no money has changed hands. Are your concerns justified?
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Treatment of distributions under review
The government has launched a consultation on modernising the tax treatment of distributions and repayments of capital by companies. The proposals could affect the distinction between dividends taxed as income and capital payments subject to CGT. What changes are being considered?
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Tax relief on equipment you haven’t paid for (yet)
The timing of tax relief for purchases of equipment isn’t straightforward when payments are delayed or goods are purchased through hire purchase (HP) agreements. How can you use these rules to your advantage and get tax relief before you’ve paid the final invoice?
Advance assurance allows a company to obtain confirmation from HMRC that its planned R&D activities are likely to qualify for relief, provided the information supplied remains accurate. The revised process is intended to encourage genuine innovation while reducing uncertainty for first-time claimants. The new approach forms part of HMRC’s wider overhaul of the R&D regime following increased compliance activity and concerns about incorrect or abusive claims. In recent years, many companies have faced lengthy enquiries and delays in receiving repayments, particularly where claims involved complex technical projects or were submitted by inexperienced advisors.
Under the updated process, eligible businesses can apply for advance assurance before making a claim. HMRC will review the company’s activities and provide an indication of whether relief is likely to be available. Where advance assurance is granted, HMRC says it will generally accept the first three years of claims provided the projects and circumstances remain consistent. The process is mainly aimed at smaller and first-time claimants that have not previously claimed R&D relief. Companies will still need to maintain appropriate technical and financial records to support their claims. For innovative businesses, the revised advance assurance system may provide greater confidence before investing significant time and cost into preparing claims. However, obtaining assurance does not remove the need to ensure that projects genuinely meet the statutory definition of R&D for tax purposes.





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