The merged R&D expenditure credit (RDEC) and enhanced R&D intensive support (ERIS)
schemes, effective for accounting periods beginning on, or after, 1 April 2024, are now
coming into play as companies with affected year ends begin to progress their claims.
The new schemes represent a significant change to R&D tax incentives and replace the
old RDEC and small and medium-sized enterprise (SME) schemes. The expenditure rules
for both are the same, but the calculation is different.

The merged scheme (new RDEC) is similar to the previous RDEC scheme with 20% of R&D
spend as a tax credit. The new scheme introduces limitations on overseas expenditure on
EPW and subcontracted R&D, and it aims to target the R&D relief to the company making
the decision to carry out R&D and bearing the risk. Restrictions for subsidised expenditure
are removed.

The R&D Intensive scheme (ERIS) 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. Under this scheme, companies can claim an 86% uplift
and a payable credit of 14.5%.

Garry Hague, Managing Director at R and D Tax Specialists, said: “The new merged scheme
represents a major change to R&D Tax relief and introduces a number of important
revisions. Recognising HMRC’s enhanced compliance regime, and the complexity of the
requirements, it’s important for qualifying companies to obtain the correct advice before
progressing claims. We are happy to provide a no obligation assessment of a company’s
viability for making a successful claim, and we can assist with all aspects of the work to
complete a claim. Please contact us on 01327 317947 / info@randdtaxspecialists.co.uk.