Changes to the R&D legislation took place that affect R&D tax relief claims for accounting periods starting or after 1 April 2024. For these periods , there are two available schemes, the “merged RDEC” scheme and the “ERIS” small companies R&D intensive scheme.
If the company is a small company then without further investigation is it is not clear which scheme will be the most beneficial.
Benefit of claiming
Under the merged RDEC scheme for each £1,000 of qualifying expenditure the company can expect to benefit by approximately £150. This figure can vary slightly depending on the impact of marginal tax relief, if applicable. The benefit is roughly the same whether the company is profitable or loss making in the period.
For more details follow claiming under the merged RDEC scheme click here.
Under the ERIS small company R&D intensive scheme, the benefit is larger in many circumstances, but not in all, as it depends on the value of R&D qualifying expenditure and the size of loss of the company in the accounting period. Typically the maximum benefit of £1,000 of R&D qualifying expenditure will be in the form of an R&D tax credit of value £269.70, but could be as low as £124.70.
For more details follow claiming under the ERIS small company scheme click here.