With the R&D merged scheme now in full force for accounting periods beginning on or after 1 April 2024, now is the perfect time for innovative SMEs to maximise R&D relief. Discover how smart spend reallocation and connected-company grouping can push you over the 30% threshold.
If your business is investing in innovation but only claiming the standard merged R&D credit, you could be leaving tens — or hundreds — of thousands on the table.
From April 2024 the rules simplified into the merged 20% above-the-line credit (worth ~15–16.2% net) or the far more generous Enhanced R&D Intensive Support (ERIS) for loss-making SMEs. The difference? Up to 27% effective relief — but only if your qualifying R&D spend hits 30% of total expenditure when measured across your entire connected group.
Maximising intensity is therefore a candidate for coolest tax term in 2026!
1. R&D Intensity Engineering – Turning “Close” into “Qualifying”
Many growing businesses sit at 20% to 28%. A few targeted moves can get you safely over 30% without changing your actual activity:
- Reallocating team time to documented R&D projects (software updates, process automation, prototype testing — all qualify).
- Bundling failed experiments or iterative development into the claim.
- Timing expenditure so high-R&D quarters push the annual average across the line.
- Claim on expenditure even if a grant covered part of those same costs.
- Include direct software licences and data licences for data storage, hardware facilities and payments for using digital datasets.
Businesses can add significant sums of qualifying spend with nothing more than better project narratives and timesheets. Plus if your intensity dips temporarily a one year grace period may allow you to continue claiming enhanced support if you met the threshold in the previous period.
2. Connected-Company Grouping – The Hidden Multiplier
Family groups, multiple trading companies, or overseas subsidiaries? HMRC requires you to aggregate R&D and total expenditure across all “connected” entities. That single calculation can be your biggest unlock.
Three group companies at 18%, 25% and 35% intensity individually could qualify for ERIS group-wide after a simple cost-share agreement, resulting in significant additional cash refunds.
HMRC’s New Targeted Advance Assurance Pilot will allow businesses to get HMRC’s view on trickier elements (project eligibility, subcontracting etc.) before you file. We are watching this space for when HMRC releases links to apply.
What We Offer Our Clients
- Free R&D Intensity Diagnostic (group-wide calculation + quick-win report).
- Full Intensity Maximiser Package — engineering, grouping structures, pilot submission, and claim preparation.
- Fixed-fee or success-based options with zero risk.
If you’re spending money on innovation in 2026, let’s make sure HMRC gives you the maximum possible back — with full certainty.
