R&D Tax Relief Reforms and New ERIS Scheme for 2026
UK R&D tax relief rules have changed significantly. From April 2024 onwards, companies of all sizes can now choose between a single merged R&D scheme and a new Enhanced R&D Intensive Support (ERIS) scheme. These changes affect how SME owners and startup founders claim R&D relief and plan innovation investment.
The Two-Scheme System (From April 2024):
- Merged R&D Scheme: Available to all companies. This combines features of the previous SME and large company schemes into one set of rules.
- ERIS (Enhanced R&D Intensive Support): A new alternative for loss-making, R&D-intensive SMEs. The intensity threshold is set at 30% of operating costs (lower than the previous SME scheme). If your company spends more than 30% of operating costs on R&D and is making losses, ERIS may offer better relief than the merged scheme.
Administrative Changes for 2026:
HMRC is running an advance assurance service pilot from May 2026, allowing companies to get pre-approval on certain R&D claims before formal submission. This reduces audit risk on borderline projects.
Tax advisers interacting with HMRC on behalf of clients must register from 18 May 2026. If you work with an accountant or tax firm, they may need to complete this registration; check with your adviser.
What This Means for SME Owners and Startups:
If your company invests heavily in innovation, you should review which scheme applies to your situation. Loss-making startups and tech companies may benefit from ERIS's lower intensity threshold. The advance assurance pilot is worth exploring if you have substantial R&D spend or uncertain qualifying expenditure.
Your tax planning team can help you structure R&D claims to maximise relief and mitigate audit risk. Work with an adviser familiar with the 2024 reforms to ensure you are claiming the right scheme.
Source: HMRC R&D Tax Relief Reforms