A Guide to Research and Development Tax Relief
There will now be the merged scheme, which broadly mirrors the existing RDEC regime for large companies, and the R&D intensive scheme, otherwise known as ERIS
The R&D scheme is changing
For accounting periods beginning on or after 1 April 2024, the R&D scheme is changing.
There will now be the merged scheme, which broadly mirrors the existing RDEC regime for large companies, and the R&D intensive scheme, otherwise known as ERIS.
The merged scheme will apply to all companies, unless the claimant company is a loss-making SME (subject to the usual thresholds) with over 40% of its total expenditure relating to R&D. There are nuances around other group companies and intangible assets that also need to be taken into consideration. The biggest changes to the schemes are firstly, detailed guidance on subcontracting and who can claim, and secondly the disallowance of overseas contractors and externally provided workers.
This will be a definitive transition for March year ends, however not for all. For example, December year ends will find that the years ended 31 December 2023 and 2024 will remain under the existing schemes, whilst the year ended 31 December 2025 will be the first year that the changes come into effect.
The changes are vast and nuanced, so please reach out to us for any queries.
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