Professional bodies cautiously welcome R&D advance clearances proposals

Responding to HMRC’s consultation Research and Development tax relief advance clearances the CIOT acknowledges the policy aims of increasing certainty improving ‘customer experience’ alongside reducing error and fraud but notes that HMRC will need to restore trust and rebuild relationships given recent experiences for many claimants – particularly as a result of the volume compliance approach.

Certainty of tax treatment is key to the success of a future system and clearances should be available to all businesses (various commentators have also suggested that there should be some sort of incentive for example reduced future compliance burden). Indeed businesses could be willing to pay for advance clearance if the process were to give a high degree of certainty that claims would not be challenged for a set period of time. Although the CIOT notes the difficulty of charging for a service that is...