R&D Tax Relief Regulations 2025

R&D Tax Relief Regulations 2025: Merged RDEC & ERIS

You might be eligible for Research and Development (R&D) tax relief if your company makes investments in technology, innovation, or process enhancements. HMRC has made significant changes to the way R&D tax relief operates in the UK as of 1 April 2024. Two new schemes have taken the place of the previous RDEC and SME programmes:

• Integrated R&D Expenditure Credit (RDEC)

• ERIS (Enhanced R&D Intensive Scheme) plan

Taxaccolega discusses the implications of these changes for your company, who is eligible to make a claim, how much you stand to gain, and how to choose the best plan for you in this blog. What’s new in from April 2024?

The government has combined and simplified the prior R&D schemes. Now, depending on your company size and R&D intensity, you may claim under.

Scheme	Who Can Claim	Benefit
Merged RDEC scheme	All UK companies doing R&D	14.7% 16.2% from R&D (after tax)
ERIS Scheme	Loss making, R&D-intensive SMEs only	27% of R&D cost in cash (tax-free)

For the majority of companies, the merged RDEC scheme
The merged R&D Expenditure Credit (RDEC) scheme is now the default for most UK businesses. 20% of your R&D expenditures may be credited if you are engaged in qualifying R&D work. It is included in your income, so it is taxed. Depending on your corporation tax rate your net benefit after taxes ranges from 14.7% to 16.2%.

✅ Principal attributes:

• Available to businesses of all sizes

• Suitable for businesses that make money as well as those that don’t

• Staff, supplies, and certain subcontractor expenses may be included

• Subject to a PAYE/NIC cap

For instance:
If your business invests £100,000 in eligible R&D:

• A £20,000 RDEC (20%) is given to you.

• The benefit is approximately £14,700 to £16,200 after taxes.

ERIS Scheme: The Enhanced R&D projects for R&D-intensive, loss-making SMEs
For SMEs that incur losses and invest significantly in research and development, the Enhanced R&D Intensive Scheme (ERIS) UK programme provides more advantages.

• If you are an SME (less than 500 employees and less than $100 million in turnover), you are eligible for ERIS.

• You’re causing losses.

• At least 30% of your overall business expenses go toward research and development.

If you qualify, you can surrender your loss for a 14.5% cash credit, which is entirely tax-free, after deducting 186% of your R&D expenses from your loss calculation.

For instance:
If you spend £100,000 on R&D, you subtract £186,000 from your earnings.

• You are eligible for a cash refund of up to £27,000.

Merged RDEC vs ERIS – Which Is Right for You?

Scenario	Recommended Scheme	Why?
Profit-making company	Merged RDEC	ERIS not available for profit-makers
Loss-making, low R&D spend (<30%)	Merged RDEC	Doesn’t meet intensity requirement for ERIS
Loss-making, high R&D spend (≥30%)	ERIS (or Merged RDEC)	ERIS gives higher benefit, but you can opt out