R&D Advance Assurance for Startups: A Practical Guide (UK)

What is R&D advance assurance?

R&D advance assurance is a pre-claim process that allows a startup to agree key elements of its R&D tax position with HMRC before submitting a formal R&D tax relief claim.

From Spring 2026, a new pilot expands access to this process under the merged UK R&D scheme, applying to accounting periods starting on or after 1 April 2024.

The aim is to reduce uncertainty, lower enquiry risk, and improve confidence for companies claiming R&D tax relief.

Why advance assurance matters more for startups

Startups typically operate with:

• Limited cash runway

• Rapid product iteration

• Outsourced or overseas development

• Incomplete technical documentation early on

Under the merged R&D rules, HMRC scrutiny has increased, particularly around eligibility, subcontracted work, and overseas expenditure. For startups, a delayed or challenged claim can materially affect cash flow.

Advance assurance shifts risk earlier in the process by addressing HMRC’s key concerns before a claim is filed.

What can be agreed in advance?

While full guidance is still pending, advance assurance is expected to allow agreement on:

• Whether planned activities meet the definition of qualifying R&D

• Which entity is entitled to claim where R&D is contracted out

• Whether specific overseas costs meet the eligibility conditions

• How the merged scheme applies to the company’s structure

Advance assurance does not replace the need for a full claim or supporting evidence, but it provides an agreed framework within which the claim is made.

Key benefits for startups

For startups, the primary advantages are:

1. Certainty before cash planning
   R&D relief assumptions can be validated before being included in forecasts or fundraising models.

2. Lower enquiry risk
   HMRC positions are agreed upfront, reducing the likelihood of post-submission challenges.

3. Faster processing
   Fewer follow-up questions where core positions are pre-cleared.

4. Clarity on overseas development
   Startups using non-UK teams can confirm eligibility before excluding or committing costs.

Who should consider advance assurance?

Advance assurance is most relevant for startups that:

• Are making their first R&D claim

• Use overseas developers or subcontractors

• Have complex group or IP arrangements

• Previously had an R&D claim reduced or rejected

• Rely on R&D tax relief as a core funding mechanism

For simple, UK-only claims with low complexity, standard submission may still be appropriate.

What advance assurance does not do

Advance assurance:

• Does not guarantee the value of the final claim

• Does not remove the requirement to submit a full R&D claim

• Does not override errors or inconsistencies in the final filing

Any divergence between what is agreed in principle and what is ultimately claimed will still require explanation.

Open questions under the pilot

As the scheme is rolled out, uncertainties remain, including:

• HMRC response times at scale

• Whether assurance will cover multiple accounting periods

• How disputes during the assurance phase will be resolved

• The extent to which technology will support faster decisions

These factors will determine how practical the scheme is for early-stage companies.

Practical takeaway for founders

For startups, R&D tax relief is no longer a low-risk, administrative exercise. It is a funding decision with real downside risk.

Advance assurance offers a way to secure clarity before committing time, money, and expectations to a claim, particularly where overseas work or outsourced development is involved.

For founders building R&D relief into runway planning, certainty may be more valuable than speed.