How UK R&D tax relief got here.

The SME R&D scheme was introduced in 2000, and the Large Company scheme followed in 2002. Between them they gave UK companies a tax incentive for carrying out qualifying research and development. Both have since been replaced: the merged scheme and ERIS apply to accounting periods beginning on or after 1 April 2024.

It was the original R&D relief for larger companies, introduced in 2002. It overlapped with the above-the-line expenditure credit from April 2013, when companies could choose between the two for expenditure incurred until 31 March 2016. The Large Company scheme was discontinued in April 2016. That is why the Large Company scheme no longer applies to current claims.

RDEC stands for research and development expenditure credit. It was introduced in April 2013 at 10% as an above-the-line credit for large companies. Its rate rose to 11% in April 2015, then from 11% to 12% in January 2018 and to 13% in April 2020. For expenditure from 1 April 2023, it was raised to 20%. Under the merged scheme the credit is 20%.

It was increased from 11% to 14.5% in April 2014. For expenditure from 1 April 2023, the SME enhancement was cut to 86% and the payable credit to 10%, although R&D-intensive SMEs kept 14.5% where the 40% intensity threshold was met. Under ERIS, the payable credit is 14.5%. Which rate applies depends on the period.

The SME enhancement was cut to 86% and the payable credit to 10%, with 14.5% kept for R&D-intensive SMEs at a 40% threshold, while RDEC rose to 20%. Data licence and cloud computing costs, and mathematics, were added to what can qualify. Claim notification also began for periods starting on or after that date.

For accounting periods beginning on or after 1 April 2023. First-time claimants, and companies whose last claim was more than three years before the end of the notification period, must tell HMRC in advance. The notification window runs from the first day of the period of account to six months after its end.

On 8 August 2023, for all claims. It must be submitted before, or on the same day as, the company tax return. Without it the claim is not accepted, or is removed from the return. The form asks for details such as cost breakdowns, connected companies and every agent who advised on the claim.

They replaced the SME and RDEC schemes for accounting periods beginning on or after 1 April 2024. The merged scheme gives a 20% expenditure credit. Enhanced R&D intensive support, ERIS, is for loss-making SMEs where relevant R&D spend is at least 30% of total expenditure. HMRC's report dates both to March 2024.

HMRC's figures show R&D error and fraud was estimated at 17.6% overall, and 25.8% for the SME scheme, in 2021-22. Over the period to 2023-24 its R&D compliance staff rose from about 100 to more than 500, and the number of compliance checks reached 9,700 in 2023-24, covering 17% of claims.

On 26 November 2025, payments between group companies for surrendered expenditure credit stopped counting for corporation tax, under the Finance Act 2026. On 18 May 2026, HMRC launched its targeted advance assurance pilot. The next fixed date to watch is the Budget on 28 October 2026. We update this page as new dated changes are confirmed.