What Qualifies

Qualifying for an R&D Tax Credit claim

To be eligible under the terms of the R&D Tax relief scheme, companies have to be engaged in technical development work in engineering, science or technology, and there needs to be a technical advance in the work being undertaken.

Contact Us For a free, no obligation assessment of your potential to claim

Claims need to:

• Identify the boundaries of where qualifying R&D was undertaken within the timeline of the R&D project
• Show clearly the technical advances
• Describe the technical uncertainties and challenges faced
• Show the steps taken to overcome the uncertainties
• Identify the value of qualifying development work

There are two schemes that are effective for accounting periods beginning on, or after, 1 April 2024.

The merged scheme R&D Expenditure Credit (RDEC) and Enhanced R&D Intensive Support (ERIS). These schemes replace the previous RDEC and small and medium-sized enterprise (SME) schemes which remain in place for earlier accounting periods. The expenditure rules for all of the schemes are the same, but the tax calculation is different.

Companies can choose to claim under the merged scheme even if they are eligible for ERIS, but they cannot claim under both schemes for the same expenditure.

The merged scheme

The merged scheme is a taxable expenditure credit and can be claimed by companies who:

• are trading
• are chargeable to Corporation Tax
• have a project that meets HMRC’s definition of R&D for tax purposes

It is similar to the former RDEC scheme – allowing 20% of R&D spend as a tax credit

Enhanced R&D intensive support (ERIS)

Enhanced intensive support is eligible to loss-making R&D intensive SMEs.

• It applies to SME companies spending more than 30% of total expenditure (including any connected companies) on qualifying R&D and having a tax loss before the R&D enhancement.
• It allows qualifying companies to deduct an extra 86% of their qualifying costs with a payable credit of 14.5%

Note: HMRC’s definition of SMEs:

Companies must be:

• ‘Limited’
• have fewer than 500 employees
• and either a turnover of no more than € 100m, or a gross balance sheet not exceeding € 86m

We provide a free, no obligation assessment of your potential to claim.