Enhanced R&D Intensive Support (ERIS) is available to loss-making SMEs whose relevant R&D expenditure is at least 30% of their total relevant expenditure, for accounting periods beginning on or after 1 April 2024. Both sides of the ratio aggregate connected companies, but payments between those companies come out of the total. This calculator checks the intensity condition; our ERIS guide covers the other conditions.
ERIS intensity calculator
*For loss-making SMEs, in accounting periods beginning on or after 1 April 2024. Connected companies are aggregated on both sides, with payments between them excluded from the total. A one-year grace period can hold ERIS where intensity dips below 30%, but only where the company both met the condition in its most recent prior 12-month accounting period and obtained relief for it: eligibility without a claim does not bank the protection.
How the 30% test works
| What applies | Figure or source |
|---|---|
| Intensity threshold | 30% relevant R&D expenditure as a share of total relevant expenditure; the statute says "at least 30%", so exactly 30% passes (CTA 2009 s 1045ZA) |
| Numerator: relevant R&D expenditure | s 1045ZA(7)(a) qualifying R&D expenditure stays in the numerator even where it takes the form of a payment to a connected company |
| Denominator: total relevant expenditure | s 1045ZA(5) broadly, expenditure brought into account under generally accepted accounting practice in calculating the profits of the trade, together with expenditure relieved under CTA 2009 s 1045 and s 1308(2) amounts (CIRD123000) |
| Connected companies | s 1045ZA(3) and (4) both sides are the aggregate across the company and every connected company, and a company counts as connected for the period if it was connected on any day within it |
| Payments to a connected company | s 1045ZA(6)(a) ignored in total relevant expenditure; leave intra-group recharges in the denominator and you understate your own intensity |
| ERIS, at or above 30% | up to 26.97p per £1 of qualifying spend: an additional 86% deduction and a 14.5% payable credit, for a loss-making SME (our ERIS guide covers the other conditions) |
Table notes
- Below 30% the company claims under the merged scheme instead, unless the grace period applies: on £1 of qualifying expenditure that is up to 16.2p rather than up to 26.97p.
- The 30% test applies to accounting periods beginning on or after 1 April 2024. Periods on the earlier 40% threshold are covered on our rates by year page; this calculator tests 30% only.
The ratio compares relevant R&D expenditure with total relevant expenditure for the period, aggregating connected companies on both sides. At or above 30%, a loss-making SME can claim ERIS: an additional 86% deduction and a 14.5% payable credit worth up to 26.97p per £1 of qualifying spend. Below 30%, the company claims under the merged scheme instead, unless the grace period applies.
Intensity questions are rarely clean: connected companies, period lengths and cost boundaries all move the ratio. We will give you a straight answer on where you stand.
Strip out payments, and other transfers of value, between the connected companies: they are ignored for this figure. Leaving them in inflates the total and understates your intensity. Qualifying R&D expenditure still counts in the figure above, even where it takes that form.
Rates and rules last reviewed 10 August 2026.
Behind the ratio
What the division takes on each side, the connected-company rules that move it, and the questions a figure near 30% raises.
What the calculation does
One division, taken on the amounts themselves rather than on a rounded percentage, and compared with 30%.
The numerator is relevant R&D expenditure for the period. The denominator is total relevant expenditure: broadly, expenditure brought into account under generally accepted accounting practice in calculating the profits of the trade, together with expenditure relieved under CTA 2009 s 1045 and s 1308(2) amounts (CTA 2009 s 1045ZA(5); CIRD123000). Where the company is connected with another, both sides are the aggregate across the company and every connected company, and a company counts as connected for the period if it was connected on any day within it.
One limb of that aggregation does most of the damage. Expenditure is ignored in total relevant expenditure where it consists of a payment, or other transfer of value, to a connected company (s 1045ZA(6)(a)), while qualifying R&D expenditure taking that same form stays in the numerator (s 1045ZA(7)(a)). Both push the ratio the same way: up. Leave intra-group recharges in the denominator and you understate your own intensity.
The test is inclusive. The statute says "at least 30%", so exactly 30% passes, and the calculator compares the amounts rather than the rounded percentage so that a figure on the line is never rounded across it.
A worked example
Company A is a loss-making SME, connected with Company B throughout the period.
Aggregated across the two companies, relevant R&D expenditure is £300,000 and total relevant expenditure as first drawn from the accounts is £1,060,000. That gives 28.3%, and on those figures the calculator returns a verdict below the threshold.
Inside that £1,060,000 sits £80,000 that A paid to B for services rather than for R&D. It is a payment to a connected company, so it comes out of the denominator. Total relevant expenditure becomes £980,000, the ratio becomes 30.6%, and the calculator returns a verdict that meets the threshold. The numerator does not move, because that £80,000 was never in it. Had the payment been for qualifying R&D, it would have come out of the denominator and stayed in the numerator (s 1045ZA(7)(a)), moving the ratio further the same way.
The same two figures, one statutory adjustment, and a company that looked like a merged-scheme claimant is an ERIS claimant. That is why the field label asks for the total with those payments already stripped out.
Company A, aggregated with Company B
| Relevant R&D expenditure | £300,000 |
|---|---|
| Total relevant expenditure, from the accounts | £1,060,000 |
| Intensity on those figures | 28.3% |
| Payment to Company B for services | −£80,000 |
| Total relevant expenditure, adjusted | £980,000 |
| Intensity, adjusted | 30.6% |
What it deliberately does not model
It tests one condition. It does not test whether the company is an SME, whether it is loss-making, whether it has sufficient losses to surrender, or whether the PAYE and NIC cap restricts what it would receive: all of those sit alongside the intensity condition, and our ERIS guide covers them.
Nor does it classify your costs. The figures are taken as given, and "relevant expenditure" has a statutory definition that a set of management accounts will not have been drawn up to match. It does not apply the grace period. And it tests 30% only: periods on the earlier 40% threshold are covered on our rates by year page.
The threshold is period-specific. The 30% test applies to accounting periods beginning on or after 1 April 2024; R&D-intensive support was introduced at 40% for expenditure from 1 April 2023, and periods on that older threshold can still be within their amendment window. If yours began before 1 April 2024, check what applied to it on our rates by year page — this calculator tests 30% only.
What changes the answer
Connected companies, first and most often: a subsidiary bought or sold part-way through the period is still connected for the period, and both sides of the ratio change when it comes in. Then the treatment of intra-group payments, as the worked example shows. Then any cost boundary that moves expenditure between the numerator and the denominator, or out of relevant expenditure altogether.
How to read the result
As one condition, tested on your arithmetic. Where the result is close to 30% the calculator shows more decimal places, adding them until the figure displayed falls on the same side of the line as the verdict. A result reading 29.90% below the threshold is not a rounding error: it is the tool refusing to print 30.0% beside a verdict that says otherwise.
A near miss is worth a proper review rather than an assumption, and so is a comfortable pass, because the boundary decisions that could have pulled you under the line are the ones HMRC would test. Eligibility, notification, deadlines and claim value are separate questions, answered by the other four tools we publish.
Questions
How is R&D intensity calculated?
Divide relevant R&D expenditure for the period by total relevant expenditure for the period, aggregating the company and every connected company on both sides, and excluding from the total any payment or other transfer of value to a connected company. If the result is at least 30%, the R&D intensity condition is met.
Total relevant expenditure is broadly what is brought into account under generally accepted accounting practice in calculating the profits of the trade, with statutory additions. It is not turnover, and it is not total costs as an accounting system happens to define them. What the 30% condition is sets out the condition itself.
What counts as total relevant expenditure?
Broadly, expenditure brought into account under generally accepted accounting practice in calculating the profits of the trade, plus expenditure relieved under CTA 2009 s 1045 and amounts within s 1308(2) (s 1045ZA(5)). Payments and other transfers of value to connected companies are excluded from it.
The practical consequence is that the denominator rarely matches a line in the accounts. It has to be built, and building it wrong in the obvious direction, by leaving group recharges in, understates intensity and can put a qualifying company below the line on paper.
How do connected companies affect the ratio?
Both sides of the ratio become the aggregate of the company's and every connected company's expenditure, so a group is tested as a whole rather than company by company (s 1045ZA(3) and (4)). A company counts as connected for the period if it was connected on any day within that period.
That last point catches groups mid-transaction. A subsidiary acquired in month eleven, or sold in month two, is connected for the whole period and its expenditure comes into both figures. Our groups and connected companies guide sets out how connection is tested.
One rule inside the aggregation catches groups out. Connected companies are counted on both sides — connection tested on any day in the period, so a subsidiary bought or sold part-way through the year still comes in — but a payment, or other transfer of value, to a connected company is excluded from total relevant expenditure. Leave intra-group recharges in the total and the denominator is inflated, which understates intensity and can put a qualifying company below the line on paper. Qualifying R&D expenditure still counts on the R&D side even where it takes that form, so the exclusion moves the ratio one way only: up.
Do payments between connected companies count?
They come out of total relevant expenditure and they stay in relevant R&D expenditure. Expenditure is ignored in the total where it consists of a payment, or other transfer of value, to a connected company (s 1045ZA(6)(a)), while s 1045ZA(7)(a) keeps qualifying R&D expenditure in the numerator even where it takes that form.
Both limbs move the ratio upwards, so the error runs against the company rather than for it. A group that has not made the adjustment is reporting an intensity lower than its real one.
What happens if we are just below 30%?
The company claims under the merged scheme rather than ERIS, unless the grace period applies. On £1 of qualifying expenditure that is up to 16.2p rather than up to 26.97p, so the distance between the two verdicts is real money.
A near miss is the case most worth checking properly. The adjustments that move a ratio by a point or two are the connected-company aggregation, the exclusion of intra-group payments and the boundary of relevant expenditure, and all three are matters of statutory definition rather than judgement.
Does the one-year grace period apply to us?
Only if you both met the intensity condition in your most recent prior accounting period of 12 months' duration and obtained relief under the ERIS chapter for that period (CTA 2009 s 1044(2A)). Both limbs are needed. Meeting the condition without claiming does not bank the protection.
It holds a position already qualified for, and it cannot carry a company over the threshold for the first time. The statute sets no proximity requirement, so it is worth checking whatever your shortfall this year.
Close to the threshold?
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