R&D Advance Assurance: One Less Thing to Worry About Faster validation for SMEs?
You might've heard rumblings across the Research and Development landscape about the UK government's new Advance Assurance scheme for R&D claims. So, what's all the fuss about? Is the system going to have a real impact, or is it just another hoop to jump through? Let's take a look and see what it's all about.
The idea itself is pretty solid, on the face of it. The government has finally noticed what we've been saying for ages - that not enough businesses with big ideas are getting the R&D Tax Credits they're entitled to. With that in mind, they're trying to remove at least one of the obstacles keeping those businesses out: the worry about whether or not they'll be rejected.
Here's how it works: if you're a smaller business looking to make your first R&D Tax Relief claim, you can send some details about your business and projects to HMRC and they'll let you know if you qualify. If you do, as long as you stick to the plan you outlined, they'll automatically approve your claim for the first three accounting periods, without asking any further questions. Honestly, it sounds pretty good, in principle.
Of course, you still have to fit the profile they're targeting with the scheme. To qualify for Advance Assurance, your business can't:
have claimed R&D Tax Relief before
have an annual turnover of more than £2 million
have 50 or more employees
There are a few other technical restrictions as well, but basically they've got their sights set firmly on newer and smaller businesses, or those who are flexing their R&D muscles for the first time. For the time being, at least, you'll also hit a few inevitable teething problems when you apply for Advance Assurance. For instance, you can only reply by post at the moment, as they don't have an online version of the form yet.
Once you've had your application accepted, you ought to get an answer within about three months. It's worth noting that a rejection at this point doesn't mean you can't claim R&D Tax Credits at all for your projects. You can still make a claim through the normal channels. Also, those size restrictions listed above only apply at the point when you make your application. If your fledgling hits its growth spurt while you're still in the scheme, the change in your size won't affect your Advance Assurance.
Overall, it's good to see the government making steps to get small business earlier recognition, and anything that encourages businesses to consider R&D Tax Relief is good news in our books. If you have questions, as always, the best thing to do is get in touch with RIFT R&D.
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