Reform of R&D advance assurance scheme is needed

New data obtained under the Freedom of Information Act by Avalon Tax shows that HMRC’s research and development (R&D) advance assurance scheme (AAS) is being underused. In 2018-19 205 applications were made and 67% were accepted (33% rejected). In 2023-24 only 86 applications were made of which 29% were accepted (71% rejected).

HMRC has not disclosed the number of applications and acceptance for AAS since 2018 so these figures give a unique insight into its use.

Jonathan Yeomans chief executive officer of Avalon Tax and a former senior HMRC tax inspector says the application numbers are ‘tiny’ and that the department has gone from approving the majority of applications to rejecting most of them.

He said: ‘The scheme has very narrow criteria for who can apply. The figures we have obtained show that HMRC’s approach has shifted dramatically from approving the...