The Government has published its response to the R&D tax relief Advanced Assurance Scheme consultation – What happens next?

At the beginning of the year, HMRC launched a consultation on its Advanced Assurance Scheme (AAS) for R&D tax relief claims.

Now, to round off the year, the Government has issued a response to the consultation that should determine the future of the AAS.

It is time to discover whether the AAS was a passing trend or if it is a part of R&D tax relief claims indefinitely.

What did the consultation find about the Advanced Assurance Scheme?

Unsurprisingly, the AAS saw limited uptake and even that has been steadily declining.

The response to the consultation attempts to determine why that is, but it is working from the potentially flawed premise that the AAS has inherent value that is being overlooked.

As such, the response considered that the low uptake may have been the result of:

• The eligibility criteria are too restrictive, with only SME claimants eligible
• A lack of awareness around the system, particularly among agents and first-time claimants
• Administrative burdens, including overly long processing time, unclear guidance and inconsistent feedback

Any delays in providing assurance render the entire system futile, as it is supposed to provide reassurance to innovative businesses before they make their claims.

However, the problem may be more deeply rooted, as, given the complexity of R&D work, it can be challenging for an AAS to work effectively.

If the project changes direction due to the technological and scientific uncertainties proving more difficult than anticipated, the AAS may be invalidated.

Likewise, a lack of understanding of the R&D tax relief system could lead to inaccurate information being submitted to the AAS, resulting in false positives or negatives.

While theoretically useful, the AAS is a poor substitute for the quality of assurance that an R&D tax consultant can provide.

What is the future of the Advanced Assurance Scheme?

As announced in the Autumn Budget, a new pilot of a targeted AAS will be trialled in 2026.

While it is not fully clear how the new AAS will differ from the old one, it is believed that some of the feedback from the consultation will be integrated.

The main critiques of the existing system were:

• HMRC need to strengthen their capability and engagement with claimants. 
• Caseworkers lacked sector expertise. 
• Better training and specialist knowledge are required to improve consistency and confidence in decision-making. 

Given that the AAS is still only being trialled, it is not clear whether HMRC will commit the resources required to make the system work.

The response did highlight that the AAS should remain an option as a mandatory implementation is unlikely to yield any long-term benefits.

We continue to advise that accountants and innovative businesses seek professional support from R&D tax consultants rather than rely on something like the AAS.

This can ensure that R&D tax relief claims are maximised and fully compliant with HMRC’s guidelines.

In the event of an enquiry, we also work to defend the full amount of eligible relief in a valid claim.

Don’t wait around for the AAS, speak to our team today for expert support with R&D tax relief claims.

Jonathan Wilde

Jon has been a professional writer since leaving school, with much of his career spent in national press journalism including 13 years working for PA Media Group. He subsequently became immersed in the corporate finance sector as a senior content writer for randd and other companies within the K3 Advisory Group, developing a detailed knowledge of R&D Tax Credits and the processes by which companies obtain tax relief.