HMRC Launches Targeted Advance Assurance: What Does This Mean for SMEs?

HMRC's Targeted Advance Assurance pilot opened on 18 May 2026, giving eligible SMEs a way to seek early guidance on specific elements of an R&D tax relief claim before filing. It doesn't replace the standard process of claiming, but for companies with complex or uncertain areas in their claim, it offers clarity before they commit.

This service is designed to give you certainty on whether your project will qualify before you make your claim. HMRC will look at up to two areas of a single project and give a view before you file your claim. SMEs claiming for the first time can use the usual Full Claim Advance Assurance process, which looks at the entire claim.

While it’s optional and free to use, it doesn’t replace the normal R&D tax relief process. You’ll still need to submit your Company Tax Return as usual, but it can help you avoid surprises by flagging issues early.

What Is Targeted Advance Assurance?

Targeted Advance Assurance is for SMEs that want clarity on one or two specific, complex or high-risk areas of an R&D claim, rather than the claim as a whole.

The four areas you can seek assurance on are whether:

1. The project meets the definition of R&D for tax purposes;
2. Overseas expenditure qualifies for relief;
3. R&D relief applies where work is contracted between companies;
4. The company qualifies for an exemption from the PAYE and National Insurance contributions cap.

You can submit up to two applications, but each must cover a single project and a single area. If you need assurance on more than one area, you must submit a separate application for each. The form is completed online and can’t be saved mid-way, so prepare everything before you begin.

The Targeted Advance Assurance service will only run for 12 months to start with, acting as a pilot service to see if there’s uptake and it results in stronger claims.

Who Can Apply for Targeted Advance Assurance?

You can apply if your company is an SME that’s carrying out or planning to carry out R&D in the period assurance is being requested for.

You mustn’t have yet claimed R&D tax relief for that period or already received assurance on two areas of the same period.

Who Cannot Apply for Targeted Advance Assurance?

Targeted Advance Assurance is not available to:

• Large companies
• Companies looking for assurance on three or more areas of their R&D claim
• Companies that have already applied for Full Claim Advance Assurance for the same period
• Companies or companies connected to persons that have entered into a disclosable Tax Avoidance Scheme (DOTAS), been categorised as a Corporate Serious Defaulter, or have an open enquiry into a Corporation Tax return

If any of these circumstances apply, you are not eligible for Targeted Advance Assurance. You’re still able to make an R&D tax claim through your Company Tax Return, but you won’t have the assurance process behind you.

What Do You Need to Apply?

To apply for Targeted Advance Assurance, you need to fill out the pilot form submission. It’s an online application, so you’ll need to prepare this information in advance, as it can’t be saved.

The sections include:

• Company details
• Entry criteria questions, to ensure you qualify for Targeted Advance Assurance
• Contact details, including for your agent if you choose to use a specialist adviser for your claim
• R&D project details, including outlines, dates, anticipated costs and the R&D tax scheme you will be using
• Your project records
• Which area of your claim you want clarity on:
  • Whether the project qualifying as R&D
  • Whether your overseas work can qualify
  • Whether your contracted agreements qualify
  • Whether you qualify for the PAYE/NIC cap exemption
• Details on the area
• Any further information

How Long Does It Take For HMRC To Process Your Submission?

HMRC aims to process Targeted Advance Assurance applications within 40 calendar days, provided the information submitted is complete and accurate.

You should ensure that you leave yourself plenty of time between your advance assurance submission and your claim deadline.

As with the Full Claim Advance Assurance service, you can still make a claim if HMRC issues you a rejection, but this puts you at risk of a compliance check. You cannot appeal the decision of Advance Assurance, so you take the risk of a full compliance check if HMRC doesn’t agree with your assessment.

Full Claim Advance Assurance vs. Targeted Advance Assurance

Full Claim Advance Assurance is an HMRC service that provides early confirmation that a company’s entire R&D tax relief claim is likely to be accepted. Instead of reviewing just part of a project, HMRC looks at the company’s R&D activities as a whole before any claims are submitted.

It is broader than Targeted Advance Assurance and is designed to give end-to-end certainty on the overall claim approach rather than specific areas. If assurance is granted, HMRC will usually accept the company’s first few R&D tax relief claims as long as they match what was agreed in advance.

The key difference is that Full Claim Advance Assurance is geared at SMEs making their first ever R&D tax relief claim. To be eligible, your company must have a turnover below £2 million and fewer than 50 employees. If you are part of a group, no linked company should have claimed R&D tax relief before.

If granted, the assurance covers your first three accounting periods, giving you real certainty right from the start of your R&D claiming journey. You can apply yourself or through your agent via the Government Gateway portal.

After applying, HMRC will arrange a phone call to discuss your R&D activities. Straightforward cases are usually resolved quickly; more complex ones may require a longer discussion or a visit to your business.

Why Would I Bother with Advance Assurance If It’s Optional?

HMRC compliance checks have risen sharply in recent years. Many companies, including those who had confidence in their claims, have had them queried or even rejected because the rules around claiming are plentiful and nuanced.

Enquiries from HMRC don’t necessarily spell disaster for your claim, but they do result in you spending more time and resources defending it. Advance assurance helps you avoid that and offers a number of genuine benefits:

• If HMRC confirms your project qualifies, you can plan around the relief with confidence. You know the money is coming and that’s certainty before you commit.
• A claim that has already been through advance assurance is far less likely to trigger a full compliance enquiry since HMRC has already looked at it. This reduces enquiry risk.
• For early-stage businesses, having HMRC's formal confirmation that your company is engaged in qualifying R&D can support conversations with investors and lenders.
• Claiming R&D tax relief requires involvement from technical staff and finance teams. Going through assurance in advance means everyone can focus on building the claim properly, saving time for future claims.

Who Should Consider Applying for Targeted Advance Assurance?

Not every SME needs it, but some situations make it particularly worthwhile.

If your team has reviewed the qualifying criteria for R&D and isn’t 100% certain their work fits, getting HMRC’s seal of approval (or rejection) will save you time and worry when making your claim.

Similarly, companies with complex contracting arrangements, like overseas contractors, projects commissioned by other companies or low PAYE/NIC costs, will benefit from knowing their claim sits within the rules.

First-time claimants should consider Full Claim Advance Assurance as standard, as it gives you much more certainty about your claim at a time when HMRC is looking closely at first-time claims.

Key Takeaways

• HMRC has launched a 12-month pilot (from 18 May 2026) for Targeted Advance Assurance, giving SMEs early, voluntary guidance on specific aspects of R&D tax relief claims.
• The service allows SMEs to seek clarity on up to two areas per project (e.g. R&D eligibility, overseas spend, contracted-out work, or PAYE/NIC cap exemption).
• A response is typically provided within 40 calendar days.
• The Targeted Advance Assurance excludes larger companies, those with open Corporation Tax enquiries, or those linked to tax avoidance schemes.
• It sits alongside (but cannot be used with) Full Claim Advance Assurance.
• Targeted Advance Assurance does not replace the standard R&D tax relief claim process.

Most SMEs with a well-prepared claim won't need advance assurance, but the pilot exists precisely for those edge cases where certainty is worth more than speed. If you're unsure whether your project meets the qualifying criteria or want guidance on a specific area of your claim, contact the Myriad team to discuss your situation.