Understanding the Latest Changes in R&D Tax Relief Advance Clearances: What Businesses Need to Know

The UK Government’s consultation on widening the use of advance clearances for R&D tax credits aims to combat error and fraud, offer businesses more certainty, and enhance the overall customer experience. This initiative is part of the government's commitment to refining the R&D tax relief system and supporting innovation.

What is the R&D Tax Relief Advance Clearance Consultation?

Launched in response to the Chancellor’s Spring Statement, the consultation seeks input on a revised system of advance clearances. It is designed to:

• Mitigate error and fraud in R&D tax relief claims
  
  
• Provide businesses with greater certainty
  
  
• Streamline the claims process

The consultation closes on 26 May 2025. Businesses are encouraged to share their views and contribute to shaping the future of R&D tax reliefs.

👉 Learn more about R&D Tax Relief Services from Tax Advisory Partnership.

Key Updates from the Finance Act 2025

The Finance Act 2025 introduced significant legislative changes affecting R&D intensive SMEs in Northern Ireland. The new provisions apply to claims made on or after 30 October 2024 and are detailed in HMRC’s Corporate Intangibles Research and Development Manual. The key changes include:

• Merged R&D schemes offering enhanced support for loss-making SMEs
  
  
• Additional information requirements for making claims

Enhanced Research and Development Intensive Support (ERIS)

HMRC’s Enhanced Research and Development Intensive Support (ERIS) scheme focuses on assisting loss-making SMEs. Businesses claiming ERIS who fail to meet eligibility criteria will be contacted by HMRC with guidance on compliance or how to amend claims.

Research and Development Expenditure Credit (RDEC)

The merged scheme R&D expenditure credit (RDEC) replaced previous SME schemes for accounting periods starting on or after 1 April 2024. Until April 2026, businesses claiming exemption from the PAYE cap must include specific instructions on their CT600L form.

For additional guidance, you can visit HMRC’s R&D tax relief guidance on the GOV.UK website.

How Can Businesses Prepare?

To navigate these changes effectively, businesses should:

• Review the consultation document and provide feedback before 26 May 2025
  
  
• Understand the new requirements under the Finance Act 2025
  
  
• Stay informed on the ERIS and RDEC scheme updates

Final Thoughts

The government’s consultation on R&D tax relief advance clearances presents an opportunity for businesses to help shape a more efficient and reliable system. Stay proactive by submitting feedback and adapting to the latest legislative changes to maximise your R&D tax relief benefits.