Enhanced R&D Intensive Support (ERIS)

Enhanced R&D Intensive Support (ERIS) – Maximising Tax Relief for R&D-Focused SMEs

The UK Government introduced Enhanced R&D Intensive Support (ERIS) as part of its wider reform of R&D Tax Reliefs, offering additional financial support for the most innovative, R&D-focused small and medium-sized enterprises (SMEs). At FI Group, we specialise in navigating the nuances of this enhanced scheme to ensure companies undertaking substantial R&D receive the highest possible level of support. Backed by our expert consultants, PhD-qualified technical teams, and global presence, we help clients claim with confidence, even under increased HMRC scrutiny.

With a proven low enquiry rate and bespoke claim processes, FI Group is the trusted partner for ambitious businesses seeking to leverage ERIS to fund their innovation roadmap.

 

What Is Enhanced R&D Intensive Support (ERIS)?

ERIS is an uplifted version of SME R&D Tax Relief designed for businesses that spend a significant proportion of their expenditure on qualifying R&D activities. From 1 April 2023, this support became available to loss-making SMEs whose R&D intensity exceeds 40% of total expenditure. The threshold will drop to 30% from April 2024, widening eligibility.

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Who Qualifies as R&D-Intensive?

To qualify for Enhanced R&D Intensive Support, a company must:

  • Be an SME under UK definitions
  • Dedicate 30% or more of total expenditure to qualifying R&D

Total expenditure includes revenue costs such as staff, rent, and overheads. The intensity calculation is based on accounting period figures, and HMRC has provided specific guidance for borderline cases.

FI Group conducts detailed R&D intensity assessments as part of our claim process, ensuring your company is correctly classified.

Key Benefits of the Enhanced Support Scheme

1. 14.5% Payable Credit

Eligible loss-making R&D-intensive SMEs can claim a 14.5% payable credit on the surrenderable loss linked to R&D activity. This is significantly higher than the standard rate under the merged scheme.

2. Financial Support for Loss-Makers

This enhanced rate provides a meaningful cash benefit for early-stage or scaling businesses that are not yet profitable, reinforcing the government’s support for innovation-led growth.

3. Subject to PAYE/NIC Cap

As with other schemes, the payable credit is subject to a cap of £20,000 plus 300% of the company’s PAYE and NIC liabilities. FI Group helps clients evaluate their cap position to avoid unexpected reductions.

How It Interacts with the Merged Scheme
How It Interacts with the Merged Scheme

While most SMEs will now claim under the merged R&D scheme, those that qualify as R&D-intensive can benefit from this enhanced support. Companies with fluctuating R&D intensity may move in and out of eligibility from year to year.

It is therefore critical to:

  • Monitor R&D expenditure closely throughout the year
  • Calculate intensity accurately at year-end
  • Maintain full supporting documentation

FI Group’s in-year tracking tools and proactive claim management services and R&D tax eligibility review help ensure your business remains prepared.

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How It Interacts with the Merged Scheme

How the ERIS Scheme Works – An Example

A biotech SME has total expenditure of £2 million for the financial year, with £900,000 of that related to qualifying R&D activities. This gives it an R&D intensity of 45% — above the threshold.

  • Qualifying R&D Spend: £900,000
  • Enhanced Deduction (186%): £1,674,000
  • Trading Loss After Enhancement: £1,674,000
  • Payable Tax Credit (14.5%): £242,730

Without ERIS, the SME would only receive a tax credit worth 10% of the loss. With ERIS, the uplift offers significantly improved support, which can be reinvested into further innovation.

Documentation Requirements

HMRC expects detailed documentation to support claims under Enhanced R&D Intensive Support. This includes:

  • Project descriptions aligned with the BEIS R&D Guidelines
  • Rationale for intensity calculations
  • Breakdown of qualifying and total expenditure
  • Records of how R&D expenditure was tracked

FI Group prepares all necessary technical narratives, cost analysis, and supporting evidence as part of our claim preparation service.

FAQs

Enhanced R&D Intensive Support

How FI Group Can Help
How FI Group Can Help

As one of the UK’s leading R&D tax relief consultancies, FI Group offers:

  • Comprehensive eligibility reviews, including R&D intensity analysis
  • In-year tracking tools to monitor qualifying spend
  • Claim preparation and submission, managed by technical experts and PhD-qualified consultants
  • Low HMRC enquiry rates due to our meticulous documentation, see our enquiry defence service here.
  • International experience, with 43 offices worldwide
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