Merged R&D Scheme: Calculate Your New Relief in 2025

Understand your effective rate, eligibility and cash impact under the merged R&D rules.

UK specialists in HMRC-compliant claims for companies across England, Scotland, Wales and Northern Ireland.

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What changed and why it matters

From 1 April 2024 the UK introduced a Merged R&D Scheme that brings the previous SME and RDEC routes into a single framework. The credit is recorded above the line and is taxable, which affects both your P&L and cash. Rules for externally provided workers (EPWs), UK subcontracting, and the PAYE/NIC cap can shift your eligible cost base significantly.

Bottom line: many finance teams are mis-estimating their benefit by 10 to 30 percent. We model both cash and P&L impact so you can plan with confidence before you submit.

Who is eligible under the merged scheme

You may qualify if your company:

Is subject to UK Corporation Tax
Carries out qualifying R&D that seeks an advance in science or technology
Incurred eligible UK R&D costs in an accounting period on or after 1 April 2024
Meets evidence expectations on technical uncertainty, competent professionals and records

If your company meets the intensive criteria, you may also access Enhanced R&D Intensive Support. Our team will confirm eligibility and the best route for your claim.

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A quick way to self-diagnose

Answer five questions to see a tailored estimate for the merged scheme:

Accounting period start date
Qualifying R&D cost range
EPWs used and engagement model
Subcontracted R&D location split
Loss making or profit making position

You will receive a range for effective rate and a cash impact forecast. For a full result and a risk review, book a free call with a specialist.

Submit Your Answers

A quick way to self-diagnose

Answer five questions to see a tailored estimate for the merged scheme:

Accounting period start date
Qualifying R&D cost range
EPWs used and engagement model
Subcontracted R&D location split
Loss making or profit making position

You will receive a range for effective rate and a cash impact forecast. For a full result and a risk review, book a free call with a specialist.

Submit Your Answers

Key features and rules to get right

Above-the-line credit: improves operating profit presentation but increases taxable profit.
Taxable credit: headline rate is not your cash benefit. Effective rate depends on CT position.
EPWs: ensure correct categorisation and evidence of R&D activities.
UK subcontracting: rules prioritise UK activity. Overseas spend needs careful treatment.
PAYE/NIC cap: cap calculation can restrict payable amounts. Early checks avoid surprises.
Records and evidence: HMRC expects clear technical narratives and cost traceability.

Old vs merged scheme at a glance

Area	Pre-April 2024 (SME/RDEC)	Merged R&D Scheme
Route	Two main routes (SME and RDEC)	Single merged framework
Presentation	SME below the line, RDEC above the line	Above the line for all
Taxability	SME relief reduced CT, RDEC taxable	Credit is taxable
EPWs	Different allowances by route	Unified rules, tighter categorisation
Subcontracting	Mixed treatment	UK subcontracting prioritised
PAYE/NIC Cap	Varied by route	Single approach, still binding
Evidence	Route-specific nuance	Consistent HMRC expectation on evidence and narratives

Unsure which rules hit your claim the hardest? Book a 15-minute eligibility call

What good looks like under HMRC scrutiny

Compliant claims show a clear thread from technical uncertainty to cost lines. We build an evidence pack that covers:

Project list and boundaries
Competent professional statements
Experiments, iterations and uncertainties
Cost mapping to activities and roles
Subcontract and EPW justifications
Replicable calculations and reconciliations

Speak to our funding team

What good looks like under HMRC scrutiny

What good looks like under HMRC scrutiny

Compliant claims show a clear thread from technical uncertainty to cost lines. We build an evidence pack that covers:

Project list and boundaries
Competent professional statements
Experiments, iterations and uncertainties
Cost mapping to activities and roles
Subcontract and EPW justifications
Replicable calculations and reconciliations

Speak to our funding team

Why choose FI Group for the merged scheme

UK-wide specialists: consultants across England, Scotland, Wales and Northern Ireland, with sector expertise in manufacturing, life sciences, software, energy and deep tech.
Compliance first: our process reduces enquiry risk and improves internal sign-off between finance and R&D.
End-to-end support: scoping, evidence capture, financial modelling, submission and HMRC dialogue.
International footprint: support for groups with UK entities and activity across Europe and the United States.

Speak to a PhD specialist aligned to your tech

Why choose FI Group for the merged scheme

UK-wide specialists: consultants across England, Scotland, Wales and Northern Ireland, with sector expertise in manufacturing, life sciences, software, energy and deep tech.
Compliance first: our process reduces enquiry risk and improves internal sign-off between finance and R&D.
End-to-end support: scoping, evidence capture, financial modelling, submission and HMRC dialogue.
International footprint: support for groups with UK entities and activity across Europe and the United States.

Speak to a PhD specialist aligned to your tech

FAQs

Merged Scheme

Have questions about the merged R&D scheme? You are not alone. Many UK businesses are still adjusting to the new rules, from effective credit rates to EPW treatment and split-year claims. Below we answer the most common questions our clients ask about eligibility, compliance and cash impact so you can approach your next claim with confidence.