Enhanced R&D Intensive Support (ERIS)

Enhanced R&D Intensive Support (ERIS) — Scheme

Provides enhanced tax relief for loss-making United Kingdom companies with intensive innovation spending.

Enhanced R&D Intensive Support (ERIS) is an HMRC scheme providing superior R&D tax relief to qualifying loss-making SMEs that spend at least 30% of their total expenditure on R&D. The mechanism delivers an 86% additional deduction on top of the normal 100% deduction — yielding a total 186% deduction of qualifying R&D costs — combined with a payable credit of 14.5% on the surrenderable loss. The effective relief rate is approximately 27p per £1 of qualifying R&D expenditure (186% × 14.5% = 26.97%), and unlike the Merged RDEC credit, the ERIS payable credit is not subject to Corporation Tax. This makes ERIS materially more valuable than the Merged RDEC for companies that qualify. ERIS applies to accounting periods beginning on or after 1 April 2024; the prior 40% intensity threshold for periods beginning 1 April 2023 to 31 March 2024 has been reduced to the current 30%.

Three conditions must all be met: the company must be an SME under the CIRD91000 definition (fewer than 500 employees, turnover under €100M or balance sheet under €86M), must be making a trading loss for tax purposes before the additional deduction is applied, and must meet the intensity condition — qualifying R&D expenditure of at least 30% of total relevant expenditure, with the denominator calculated to include all connected companies worldwide (not just the UK entity). Companies that met the intensity condition in their most recent 12-month accounting period and made a valid claim in that period for expenditure on or after 1 April 2023 may also qualify even if temporarily below the threshold. The PAYE cap applies (£20,000 + 300% of relevant PAYE/NIC), but any excess above the cap is forfeited rather than carried forward — a key distinction from the Merged RDEC.

The process is identical to Merged RDEC in administrative terms: mandatory Additional Information Form before CT600 filing, Claim Notification for first-time or returning claimants, and optional Advance Assurance. Northern Ireland SMEs claiming ERIS are exempt from the overseas contractor and externally provided worker restrictions under special NI rules. Companies can choose to claim Merged RDEC instead of ERIS if that proves more beneficial, but cannot claim both schemes for the same expenditure. The scheme is claimed annually via Corporation Tax return with no competitive application, pitch, or scoring process.