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Enhanced R&D intensive support (ERIS)
A specialised, more generous regime designed for loss-making SMEs that invest a significant portion of their expenditure in R&D.
R&D Tax Credit Relief · UK
Enhanced R&D intensive support
- Claim up to 27p per £1 spent
- Loss-making SMEs only
- ≥ 30% R&D intensity
To qualify under the ERIS scheme, a company must meet the definition of R&D intensity. This is based on the proportion of its total relevant expenditure that relates to qualifying R&D.
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£63,000
Average claim
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2,400+
Claims submitted
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Millions
Recovered for clients
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100%
HMRC compliant
What is the R&D ERIS scheme?
Enhanced R&D intensive support is a targeted form of R&D tax relief that is available to certain SMEs. It applies where a company is loss-making and meets the definition of an R&D intensive company.
This scheme sits alongside the merged R&D scheme, it provides an alternative route to claiming R&D tax relief where companies meet a stricter criteria that aligns with their level of qualifying R&D expenditure.
The intent of ERIS is to support companies whose activity is heavily focused on research and development, particularly in areas where that activity has not yet generated taxable profits.
For eligible companies, ERIS can provide a higher rate of payable tax credit than would be available under the merged scheme.
Compare HMRC ERIS & merged scheme R&D tax relief rates
Understand the requirements and key changes for R&D tax credits schemes
Swipe sideways to compare all options
| Company type | Enhanced R&D intensive support | Merged scheme |
|---|---|---|
| Primary target | Loss-making R&D intensive SMEs | All companies (default) |
| R&D intensity req. | ≥ 30% | None |
| Benefit mechanism | 86% add. deduction + 14.5% credit | 20% taxable credit |
| Cash value (approx.) | Up to ~27% of spend | Up to ~15%-16.2% of spend |
| Credit taxable? | No: non-taxable cash payment | Yes: taxable income |
| CNF required? | Yes | Yes |
Which R&D tax credit scheme is right for you?
Can’t decide which scheme is right for your business? We understand finding the right scheme for your business is key!
From 1 April 2024, the UK’s R&D tax relief rules changed significantly. Most companies now claim under the merged scheme, which uses a taxable RDEC at a general rate of 20%. Loss-making SMEs that meet the 30% R&D intensity threshold may instead qualify for ERIS, which can provide a benefit of around 27%.
Merged scheme (RDEC)
Combines the old RDEC and SME schemes into an “above-the-line” credit. It is now the default scheme for most companies.
Enhanced R&D intensive support
For loss-making SMEs where R&D expenditure is at least 30% of their total expenditure. Typically provides up to 27p per £1 spent through a 14.5% tax credit on surrenderable losses.
Who it’s for: Loss-making SMEs.
Eligibility intensity: The company must have an R&D intensity (R&D spend / Total expenditure) of at least 30%.
Benefit: A higher payable credit rate (14.5% of the surrenderable loss).
Prerequisite: A Claim Notification Form (CNF) must be submitted to HMRC within 6 months of the end of the period of account if the company is claiming for the first time or has not claimed in the previous three years. For instance, if your accounting period ends on 31 December 2026, the deadline is 30 June 2027.
Mechanism: Allows an additional 86% deduction, resulting in a higher cash benefit than the merged scheme.
- Cash credit rate: 14.5% of surrenderable loss
- Relief rate: 186% total deduction
Not sure if ERIS applies to you?
We’ll review your R&D expenditure and intensity ratio at no cost to determine whether you qualify for ERIS or the merged scheme.
Check your eligibility
When could ERIS be relevant to a company?
ERIS is particularly relevant for companies that:
Are investing heavily in activities aimed at achieving advances in science or technology
Are loss-making in the relevant accounting period
Incur a high proportion of qualifying R&D expenditure relative to total relevant expenditure
Employ technical staff engaged in resolving scientific or technological uncertainty
With that being said, the eligibility of research and development activity will depend on the nature of the work, rather than the sector itself.
What qualifies as an R&D intensive SME?
To qualify for ERIS, a company must meet the R&D intensity threshold. Qualifying R&D expenditure must represent at least 30% of its total relevant expenditure for the accounting period, based on figures from its accounts and Corporation Tax computation.
Typical qualifying eligible expenditure includes:
Qualifying R&D expenditure generally falls into six main categories of revenue costs that relate directly to qualifying R&D activity.
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Staff costs
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Externally provided workers (EPW)
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Software
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Consumables
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Data and cloud computing
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Prototypes
Non-qualifying expenditure typically includes:
Expenditure that falls outside the qualifying categories, or costs that don’t relate directly to qualifying R&D activity, cannot be included.
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Capital expenditure
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Production and distribution costs
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Routine testing and analysis
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Indirect overhead costs
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Intellectual property costs
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Specific staff costs
Non-taxable payable credit
Applies only to loss-making SMEs meeting the 30% intensity threshold. The benefit is received as a cash payment, it does not increase taxable profits. The effective rate is approximately 27% of qualifying spend.
Period-by-period assessment: A company may qualify for ERIS in one accounting period but not in another. Eligibility must be assessed separately for each period based on R&D expenditure relative to total relevant expenditure.
Mechanics: Corporation Tax computation
Under ERIS, eligible loss-making companies can access a higher rate of payable credit than under the merged scheme. The relief is calculated through the Corporation Tax computation based on qualifying R&D expenditure.
Mechanics: Payable cash credit
For eligible companies, ERIS typically provides a payable cash credit rather than reducing Corporation Tax liability. Unlike the merged scheme’s RDEC, the ERIS credit is non-taxable and does not increase taxable profits.
How does ERIS relief work?
If a company’s claim does not meet the ERIS criteria, it will typically fall within the merged R&D scheme instead. The two schemes differ in scope, eligibility, and the nature of the relief provided.
Several recurring issues arise when companies assess whether their activities and expenditure meet the ERIS criteria. Claims under ERIS follow the same administrative framework as other R&D tax relief claims and are submitted through the company’s Corporation Tax return. The process involves five stages:
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Identifying qualifying activity
Technical work is not always recognised as R&D internally. This is especially common in software engineering and manufacturing, where scientific or technological uncertainty may be embedded in day-to-day work.
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Calculating the intensity ratio accurately
The 30% threshold requires precise classification of both qualifying and non-qualifying expenditure. Misallocation can create compliance risk and affect overall eligibility.
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Documenting technical uncertainties
HMRC expects claims to clearly explain: the scientific or technological uncertainty faced; why it could not be resolved using existing knowledge; and the work undertaken to resolve it. Insufficient documentation significantly increases the likelihood of an HMRC enquiry or claim adjustment.
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Prepare the Additional Information Form (AIF)
The AIF is mandatory for all claims. It provides HMRC with in-depth project descriptions and details of the expenditure included. Claims without an AIF will be rejected.
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Submit within the Corporation Tax return
File the claim, AIF, and supporting documentation with HMRC as part of the CT return for the relevant accounting period.
What counts as qualifying R&D under ERIS?
ERIS uses the same definition of Research and Development as all other HMRC R&D schemes. Qualifying activity must meet all of the following:
Eligible
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Seeking to advance in science or technology
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Involve scientific or technological uncertainty
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Require an investigation or experimentation process
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Developing new software systems or algorithms
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Creating new engineering designs
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Improving manufacturing processes
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Testing and refining technical prototypes
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Developing new data processing methods
Not eligible
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Overseas restrictions
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Routine software updates
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Non-technical advances
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Standard engineering
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Production and distribution
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Routine quality assurance
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Commercial, financial and legal work
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Market research and customer testing
- Fully managed R&D claims
- HMRC-compliant technical reports
- No win, no fee assurance
- Specialist UK R&D advisers
What our clients say
Independent Google reviews from businesses we’ve helped claim R&D tax relief.
FAQs about the R&D ERIS scheme
Yes. Eligibility is assessed separately for each accounting period, so a company may qualify for ERIS in one period and fall within the merged scheme in the next. This depends on whether it is loss-making and meets the 30% intensity threshold in that period. HMRC states: even if you are eligible for ERIS you can choose to claim under the merged RDEC scheme.
The claim will normally fall under the merged scheme, which is worth around 15%–16.2% of qualifying spend rather than up to 27%. There is a one-year grace period: a company that met the threshold and made a valid claim in its previous 12-month accounting period can still claim ERIS for the following period.
Yes. The calculation combines the qualifying R&D expenditure and total relevant expenditure of the company and any connected companies. Companies are connected if one controls the other, or both are controlled by the same person or persons, whether they are based in the UK or overseas.
No. Unlike the merged scheme’s expenditure credit, the ERIS payable credit is not taxable. It is received as a cash payment and does not increase the company’s taxable profits.
No. ERIS uses the same definition of R&D as the merged scheme. The differences are in who can claim (loss-making SMEs that meet the intensity threshold) and the rate of relief.
Yes. The payable credit is capped at £20,000 plus 300% of the company’s relevant PAYE and NIC liabilities for the period. Companies are exempt if their own employees create or actively manage the intellectual property, and no more than 15% of their qualifying expenditure goes on subcontractors or externally provided workers from connected companies. Under ERIS, a credit claim above the cap is invalid.
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