Measure
The government will introduce legislation in Finance Bill 2024-25 to correct an error in the rules for the enhanced relief for R&D intensive small and medium sized companies (ERIS). The change ensures that all qualifying R&D expenditure is taken into account when calculating the R&D intensity threshold.
Finance Bill 2024-25 will also include legislation to move the special provisions for Northern Ireland companies in the ERIS rules from regulations to primary legislation. The new legislation also updates the cap on relief for certain Northern Ireland companies to align with EU state aid de minimis limits.
R&D intensive small and medium sized companies.
The technical correction of the intensity threshold will be retrospective and take effect from 1 April 2023.
The change for Northern Ireland companies will apply to all relevant claims made on or after 30 October 2024.
HMRC have previously confirmed that companies should include all qualifying R&D expenditure when calculating the intensity ratio, and that corrective legislation would be introduced in due course. Affected businesses will welcome the certainty provided.