A white background with a few lines on it

R&D Tax Credits in Manchester: Claim What You've Earned

Are you leaving money on the table?

Building software nobody has built before? Solving a technical problem in manufacturing, engineering or product design? Trying something that might not work?

That might be research and development, and HMRC may reward it.

I'm Adam Nurbhai FCCA, founder of Enso. R&D tax credits are one of the services we offer Manchester founders alongside year-end compliance, management reporting and forecasting. The rules changed significantly in 2024, so here's the plain-English version.

The rules now: merged RDEC and ERIS

For accounting periods beginning on or after 1 April 2024, the old SME and RDEC schemes were replaced by two schemes:

  1. The merged R&D expenditure credit (merged RDEC). A taxable credit at 20% of qualifying R&D expenditure. Available to companies that are trading, chargeable to Corporation Tax and have a project that meets the definition of R&D.
  2. Enhanced R&D intensive support (ERIS). For loss-making, R&D-intensive SMEs. You deduct an extra 86% of qualifying costs (186% in total) and can claim a payable tax credit worth up to 14.5% of the surrenderable loss.

To be "R&D intensive", relevant R&D expenditure generally needs to be at least 30% of total expenditure, including connected companies.

You can't claim both schemes for the same costs. Profit-making SMEs, and SMEs that aren't R&D intensive, claim under the merged RDEC scheme.

There's also a cap. In either scheme, the credit generally can't exceed £20,000 plus 300% of the company's relevant PAYE and NIC liabilities for the period.

Do / Don't: making a claim that stands up

Do

  • Check if you need to tell HMRC in advance. First-time claimants (or those whose last claim was more than three years ago) must file a claim notification within six months of the end of the period of account. Miss it and the claim is invalid.
  • Keep records as you go: project aims, the uncertainty you faced, what you tried, and what it cost.
  • Track staff time on R&D projects in your accounting software.
  • Submit HMRC's additional information form with every claim.

Don't

  • Claim routine work. Using existing technology as intended isn't R&D.
  • Leave it until the tax return is due.
  • Trust anyone promising a guaranteed payout.
  • Assume last year's scheme still applies. Check the period start date.

How we help

  1. Eligibility check. A conversation about your projects to see whether they're likely to meet the definition of R&D.
  2. Deadlines. We work out your claim notification period and file in time.
  3. Costs. We identify qualifying costs from your books, which is much easier when your Xero is clean.
  4. Scheme choice. We check whether ERIS or merged RDEC applies and model the outcome.
  5. The claim. Technical narrative, additional information form and Corporation Tax return, done properly.
  6. Joined-up support. Your claim ties into your year-end accounts, forecasts and cash planning.

Why Enso?

We're tech-first and human-led. You speak to the person doing the work, not a call centre. And because we look after your books, compliance and reporting, the claim isn't a one-off exercise bolted on at the end. It's part of how you plan.

One question before you go: what did your team build or solve last year that kept them up at night?

That might be your claim.

Frequently asked questions

What's the difference between merged RDEC and ERIS?
Merged RDEC is a 20% taxable credit for most companies. ERIS is for loss-making SMEs whose R&D spend is at least 30% of total expenditure. It gives an extra 86% deduction and a payable credit of up to 14.5% of the surrenderable loss.

Do I need to tell HMRC before I claim?
If it's your first claim, or your last one was more than three years before the end of the claim notification period, yes. The notification must be in within six months of the end of the period of account. HMRC has said the form won't be needed for claims made on or after 1 April 2027.

Can a loss-making startup claim?
Yes. If it meets the R&D intensity condition, ERIS may give a payable credit. If not, the merged RDEC scheme may still apply.

Is the credit taxable?
The merged RDEC is taxable as trading income. The ERIS payable credit isn't liable to tax.

What records should I keep?
Project descriptions, the technical uncertainties, staff time, and costs such as staff, subcontractors, software and consumables.

Get in touch

Think you might have a claim?
Call or WhatsApp Adam on 0161 511 2143 or email adam@meetenso.co.uk .
Enso Accountants, 189c Mauldeth Road, Manchester M19 1BA.