Quick answer: The merged R&D scheme is the single UK research and development tax relief that replaced the separate SME scheme and RDEC for accounting periods beginning on or after 1 April 2024. It delivers a 20% above-the-line credit to companies of all sizes, with a higher 27% ERIS rate for qualifying loss-making R&D-intensive SMEs.
What is the merged R&D scheme?
The merged R&D scheme is the unified UK research and development tax relief that applies for accounting periods beginning on or after 1 April 2024. It replaces the separate SME scheme and the Research and Development Expenditure Credit, consolidating the rules on qualifying expenditure, subcontracting, subsidised expenditure and grant interaction. The relief is delivered as a 20% above-the-line expenditure credit available to companies of all sizes. A separate higher-rate Enhanced R&D Intensive Support track remains for loss-making R&D-intensive SMEs.
How does HMRC define the merged scheme?
HMRC guidance on the merged scheme is at CIRD90100 onwards of the CIRD Manual. The legislation is in Chapter 1A of Part 13 of the Corporation Tax Act 2009 inserted by Finance (No. 2) Act 2023. Key technical changes include UK-workforce rules for subcontractors and externally provided workers, and simplification of the subsidised-expenditure mechanism. The 27% ERIS rate for loss-making R&D-intensive SMEs is set out at CIRD90700, and a PAYE and Class 1 NIC cap limits the payable credit for loss-making companies claiming under either route.
What does a merged-scheme claim look like in practice?
A medium-sized engineering group with £3,000,000 of qualifying R&D expenditure in its year ended 30 September 2025 claims under the merged scheme. The pre-tax credit is £600,000, and the post-tax net benefit at the 25% main corporation tax rate is approximately £450,000, equivalent to 15p per £1 of qualifying spend. The free eligibility calculator can give an indicative net benefit for your own qualifying spend under the merged scheme.
Related terms
Frequently asked questions
The merged R&D scheme is the unified UK research and development tax relief that applies for accounting periods beginning on or after 1 April 2024. It replaces the separate SME scheme and the Research and Development Expenditure Credit (RDEC).
The merged scheme delivers a 20% above-the-line expenditure credit, available to companies of all sizes. A separate Enhanced R&D Intensive Support (ERIS) track pays 27% for qualifying loss-making R&D-intensive SMEs.
The merged scheme introduced UK-workforce rules for subcontractors and externally provided workers, and simplified the subsidised-expenditure mechanism that applied under the old SME scheme.
Yes. A PAYE and Class 1 NIC cap limits the payable credit for loss-making companies claiming under either the standard merged-scheme route or ERIS.