Who is eligible for the R&D Merged Scheme?

The R&D Merged Scheme is available to companies in the UK who are:

• Within the scope of Corporation Tax.
• Carrying out qualifying R&D work.

It applies to accounting periods beginning on or after 1 April 2024. Unlike the previous system, where separate schemes generally applied to SMEs and larger companies, the R&D Merged Scheme provides a common route for companies of different sizes.

Being a company that spends money on R&D doesn’t automatically make the expenditure eligible. The activities must form part of a project seeking an advance in science or technology. The project must also involve scientific or technological uncertainty that couldn’t readily be resolved by a competent professional working in the relevant field.

Companies must then identify the activities that directly contribute to resolving those uncertainties and determine which costs fall within the permitted categories of qualifying expenditure. The Merged Scheme also contains specific rules covering areas such as contracted-out R&D and overseas expenditure, so eligibility for individual costs will depend on the circumstances in which the R&D is undertaken.