Quick answer: Uplift rate was the additional-deduction percentage under the old SME R&D scheme: 130% from 2015 to 31 March 2023, reduced to 86% from 1 April 2023. From 1 April 2024 the uplift mechanism was replaced by the merged scheme's above-the-line credit, so it no longer applies to current claims.
What was the uplift rate?
The uplift rate was the additional deduction percentage under the old SME R&D scheme, giving companies an enhanced deduction on top of the 100% revenue deduction for qualifying R&D expenditure. From 2015 to 31 March 2023 the uplift was 130%, giving a total deduction of 230% of qualifying spend. From 1 April 2023 the uplift was reduced to 86%, giving a total deduction of 186%. From 1 April 2024 the uplift mechanism was replaced by the above-the-line credit of the merged scheme, and the concept no longer applies to new claims.
How did HMRC define the uplift rate?
HMRC guidance on the uplift is at CIRD89120 of the CIRD Manual, covering the historic SME regime. The rate reductions were set by Finance Act 2022 and Finance (No. 2) Act 2023. The replacement of the SME scheme by the merged regime is documented at CIRD90100.
What did the uplift rate look like in practice?
An SME with £400,000 of qualifying R&D expenditure in the year to 31 December 2022 obtained a 130% uplift of £520,000, producing a total tax deduction of £920,000 including the underlying £400,000. For the same expenditure incurred in the year to 31 December 2024, the company instead claims a 20% above-the-line credit under the merged scheme.
Related terms
- Small or Medium-Sized Enterprise (SME, R&D)
- Merged R&D Scheme
- Above-the-Line Credit
- Enhanced Deduction
Frequently asked questions
The uplift rate was the additional deduction percentage on top of the 100% revenue deduction for qualifying R&D expenditure. It was 130% from 2015 to 31 March 2023 (a 230% total deduction), reduced to 86% from 1 April 2023 (a 186% total deduction).
No. From 1 April 2024 the uplift mechanism was replaced by the above-the-line credit of the merged scheme, and the uplift rate no longer applies to new claims. The eligibility checker reflects the current merged-scheme rules rather than the old uplift mechanism.
An SME with £400,000 of qualifying R&D expenditure in the year to 31 December 2022 obtained a 130% uplift of £520,000, producing a total tax deduction of £920,000. For the same expenditure incurred in the year to 31 December 2024, the company instead claims a 20% above-the-line credit under the merged scheme.