Quick answer: Enhanced R&D Intensive Support (ERIS) gives loss-making UK SMEs a higher payable credit rate of 27p per £1 of qualifying R&D expenditure, where that spend is at least 30% of total expenditure in the accounting period. It replaces the standard merged-scheme rate of around 16.2p per £1 for loss-making companies.
What is Enhanced R&D Intensive Support (ERIS)?
Enhanced R&D Intensive Support, known as ERIS, is a targeted relief for loss-making UK small and medium-sized enterprises that are R&D-intensive, defined as those whose qualifying R&D expenditure is at least 30% of total expenditure in the accounting period. For accounting periods beginning on or after 1 April 2024, ERIS gives a payable credit rate of 27p per £1 of qualifying expenditure, compared to approximately 16.2p per £1 under the merged scheme for loss-making companies. The intensity threshold was initially 40% before being reduced to 30% from 1 April 2024.
How does HMRC define ERIS eligibility?
ERIS is legislated in Chapter 2 of Part 13 of the Corporation Tax Act 2009 as amended by Finance (No. 2) Act 2023. HMRC guidance is at CIRD90700 of the CIRD Manual. The intensity threshold, total expenditure definition and connected-company aggregation rules are set out at CIRD90720 and CIRD90740.
What does ERIS look like in practice?
A pre-revenue biotech SME has total expenditure of £1,200,000 in its year ended 31 March 2025, of which £500,000 is qualifying R&D. The intensity ratio is 42%, above the 30% threshold, so the company qualifies for ERIS. The 27% payable credit on £500,000 of qualifying spend produces a cash benefit of £135,000.
Worked example: ERIS vs the standard merged-scheme rate
The same £500,000 of qualifying R&D produces a materially different cash outcome depending on intensity. At the standard merged-scheme rate for a loss-making company (approximately 16.2p net benefit per £1), £500,000 yields around £81,000. At the ERIS rate of 27p per £1, the same £500,000 yields £135,000 - a difference of £54,000 in cash terms for crossing the 30% intensity threshold, which is why intensity is checked every accounting period, not just once.
Who typically qualifies for ERIS
ERIS is aimed squarely at early-stage, loss-making, R&D-intensive companies - pre-revenue biotech, deep-tech and advanced-engineering businesses are the most common claimants, since their staff costs and consumables spend is typically a large share of total expenditure by design. A company that becomes profitable, or whose R&D share of spend drops below 30% as it scales commercial operations, moves onto the standard merged-scheme rate the following period rather than losing relief altogether. The 30% threshold is measured against total company expenditure for the period, not just R&D-adjacent spend, so a company with significant non-R&D overheads - office space, sales and marketing, general administration - needs a genuinely R&D-heavy cost base relative to its size to clear the bar, which is why ERIS claimants skew heavily towards pre-revenue, engineering-led businesses.
Related terms
Frequently asked questions
Yes. Intensity is tested every accounting period, so a company can qualify for ERIS in a low-revenue year and fall back to the standard merged-scheme rate once its R&D share of total expenditure drops below 30%, without any permanent loss of relief. Use the free eligibility calculator for an indicative view of how ERIS compares to the standard rate.
At least 30% of a company's total expenditure in the accounting period must be qualifying R&D. The threshold was reduced from an initial 40% to 30% from 1 April 2024.
ERIS pays 27p per £1 of qualifying spend, compared to roughly 16.2p per £1 under the standard merged-scheme rate for loss-making companies, a difference of £54,000 on £500,000 of qualifying spend in the worked example above.
Early-stage, loss-making, R&D-intensive companies, such as pre-revenue biotech, deep-tech and advanced-engineering businesses, where staff costs and consumables form a large share of total expenditure.