ERIS and the 30% R&D Intensity Threshold Explained

Quick answer: Enhanced R&D Intensive Support, or ERIS, is a route for loss-making companies whose R&D spend is at least 30% of their total expenditure. Qualifying companies get a 186% deduction and a payable credit worth up to 14.5% of the surrenderable loss, instead of the standard 20% merged scheme credit.

Enhanced R&D Intensive Support, usually shortened to ERIS, is the part of the reformed R&D system aimed at loss-making companies that spend heavily on research and development relative to their overall costs. It sits alongside the merged scheme and gives a more generous outcome, but only to companies that clear a specific intensity test. The rules are set out in HMRC's merged scheme and ERIS guidance, and this guide explains how the threshold works.

What Is R&D Intensity and How Is It Measured?

R&D intensity is the proportion of a company's total spending that goes on qualifying research and development. A company is R&D-intensive for ERIS where its relevant R&D expenditure is at least 30% of its total expenditure for the period. The figure is a ratio, not a cash amount, so a small company with modest spend can still qualify if enough of that spend is on R&D. When working out the ratio, the expenditure of connected companies is taken into account, which means a company in a group cannot always look only at its own numbers [own-analysis].

What Does ERIS Give a Qualifying Company?

Instead of the standard above-the-line credit, ERIS uses an enhanced-deduction mechanism. A qualifying company can deduct an extra 86% of its qualifying costs on top of the normal 100%, a 186% total deduction, then surrender the resulting loss for a payable credit worth up to 14.5% of the surrenderable loss. That is more valuable than the 20% taxable credit under the merged scheme, which is why the 30% test matters so much for cash-hungry, research-led companies. Our guide for loss-making companies covers the wider picture.

Which Companies Can Claim ERIS?

ERIS is for loss-making companies only; a profitable company uses the standard 20% merged scheme credit regardless of how research-led it is [own-analysis]. In practice the route suits early-stage and pre-revenue companies in fields like biotech, deep tech and advanced engineering, where R&D can easily make up most of the cost base [own-analysis]. Our pre-revenue R&D claim guide looks at how these companies build a claim before they are profitable.

How Does the Accounting Period Affect ERIS Eligibility?

ERIS applies to accounting periods beginning on or after 1 April 2024, and the test is applied to the whole period based on its start date. A period that began before that date stays on the old SME rules for its entire length rather than being split partway through [own-analysis]. If you want an indicative figure under the current rules, our free R&D tax relief calculator gives a range in minutes.

Get a Written View, No Call Required

If you think your company might clear the 30% intensity test but are not certain, reply and we will send a free written eligibility assessment within 48 hours, no call involved [own-analysis].