The latest R&D Communication Forum (RDCF) hosted by HMRC delivered some important developments in the administration of UK R&D tax relief. From refinements to the Advance Assurance (AA) process to the rollout of agent education initiatives, these updates reflect HMRC’s broader mission to improve transparency, reduce fraud, and enhance user experience for both claimants and agents.
Whether you're an innovative startup, a scaling tech company, or an advisor navigating R&D tax claims, here's a full breakdown of the most relevant changes and what they mean for you.
Advance Assurance (AA) Scheme: A Fresh Look Ahead
HMRC is actively consulting on its Advance Assurance scheme, aiming to make it more effective in deterring fraudulent claims and improving claimant confidence. This digital-first consultation is seeking feedback on:
- Eligibility criteria: HMRC is considering limiting access based on sector or risk profile, focusing resources where they’re most needed.
- Timing: AA may apply pre-activity, pre-claim, or pre-payment—each offering different levels of reassurance.
- Scope: The scheme won't guarantee final claim approval, but it should give clearer guidance upfront.
- Minimum spend threshold: To filter out lower-value claims and manage HMRC resources, a threshold could be reintroduced.
- Integration with CNF: HMRC confirmed the AA scheme could replace the Claim Notification Form to avoid duplication.
- Clarity on grey areas: Companies may use the AA process to resolve uncertainties around contracted-out or overseas R&D.
This initiative aims to provide better support for legitimate claims while tightening controls on potentially abusive ones.
Operational and Compliance Updates: Moving Towards Efficiency
HMRC’s Wealthy and Mid-sized Business Compliance (WMBC) unit is taking a more central role in handling volume claims. Several steps are being taken to streamline operations:
- Target: Process 85% of R&D claims within 40 days.
- Internal training: WMBC staff are receiving updated training informed by feedback from agents and claimants.
- IT systems: HMRC is exploring digital improvements to provide real-time updates on claim status—though this will take time.
- Response time: The general mailbox has a target response time of 5 working days. Escalation is encouraged if delays occur.
These efforts show HMRC’s commitment to balancing speed with accuracy while reducing friction in the review process.
The Agent Education Model (AEM): Support Over Sanction
Launched in early 2024, the Agent Education Model marks a shift in how HMRC handles non-compliant or error-prone claims from advisors. Instead of defaulting to penalties, the AEM encourages improvement through education:
- How it works: Selected agents work with a dedicated Agent Relationship Manager to identify and correct recurring issues.
- Voluntary participation: Around 16 agents are currently involved, with plans to expand as demand grows.
- Important clarification: Participation does not offer preferential treatment or accreditation, and HMRC will still take further action where necessary.
For agents, the AEM presents an opportunity to improve claim accuracy and reduce the risk of investigations.
AIF & CNF Updates: Practical Fixes for Common Errors
Claimants who previously had claims rejected due to technical mistakes, such as incorrect Unique Tax Reference or accounting dates on the Additional Information Form (AIF) or Claim Notification Form (CNF), can now breathe a sigh of relief.
- Error correction: HMRC will now accept amended AIF/CNFs where submission errors can be evidenced. Companies will be contacted to resubmit their claims electronically.
- Guidance misstep: Incorrect HMRC guidance published between 8 September and 17 October 2024 led some claimants to miss CNF deadlines. Affected businesses may now submit claims under a temporary easement, provided they meet specific criteria.
- Project updates: Companies do not need to resubmit a CNF if additional R&D projects were started after the original CNF submission.
These pragmatic changes should reduce the number of rejected claims due to simple administrative mistakes.
Introducing the R&D Expert Advisory Panel
In a promising move for the future of UK R&D tax relief, HMRC is setting up an Expert Advisory Panel. The goal? To bring industry insights into the heart of policy and guidance design.
- Panel composition: Six experts from high-growth sectors, Tech Development, Artificial Intelligence, Advanced Manufacturing, and Life Sciences, will advise HMRC.
- Scope: Experts will not be involved in operational decisions but will help refine how scientific and technological uncertainties are interpreted.
- Applications: Recruitment is now live via the UK Government's public appointments website and will remain open for four weeks.
This marks a positive step toward aligning HMRC’s understanding of innovation with real-world industry challenges.
Final Thoughts
It’s clear that HMRC is taking a multi-pronged approach to improving the R&D tax relief scheme. By focusing on digital consultation, educational support for agents, and sector-specific expertise, they are aiming for a system that is both robust and fair.
While many of these initiatives are still in their early stages, they point toward a more streamlined, transparent, and collaborative future for R&D tax relief in the UK.
If your business is involved in R&D or you advise clients who are, staying informed about these changes is critical. As always, when in doubt, especially around the CNF, it's better to err on the side of caution and engage early with HMRC.
Need Advice on Complex or Unusual R&D Claims?
At ResearchQX we specialise in helping innovative companies navigate the complexities of R&D claims through HMRC-compliant process. If you have any questions, please feel free to book a free consultation today or get in touch with our team of R&D tax specialists.
