Intensive Support for SME R&D Claims: Explained!

This week, I'm highlighting how the Small & Medium Enterprise, Intensive Research & Development incentive works.

Watch the video version here.

Since January 2025, we have a new acronym—ERIS which stands for Enhanced Research & development Intensive Support. ERIS is designed to give a higher-level of R&D incentive to qualifying, loss-making Small and Medium Enterprises (SMEs). It does this by providing a different calculation method from the standard RDEC method.

SME’s are broadly defined as companies, or a group of companies, with under 500 employees.

To be eligible, a company (or group of connected companies) must:

1. Have a trading loss in the relevant accounting period, prior to any R&D claim.
2. Meet the R&D intensity condition, which, for accounting periods starting from 1st April 2024, requires at least 30% of total annual expenditure to be on qualifying R&D.

Checking which is the optimal route for a claim is essential.

The maximum payable tax credit (i.e. cash payment) under ERIS is approximately 27% of qualifying R&D expenditure. However, if a company has only a small loss compared to its R&D expenditure, the main scheme (RDEC) may give a larger incentive—so, before submitting a claim using the ERIS calculation method, it is crucial to check which option will be optimal.

?? For ERIS details follow this link: https://bit.ly/ERIS-for-SMEs.

?? For help or to ask a question follow this link: https://www.randdtax.me/contact

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