Grants and R&D tax relief – what does the future look like?

Grants have always been one of the trickiest areas of R&D tax relief. Under the SME scheme, receiving a grant could restrict what costs were eligible, and simply working out what type of grant had been received (and when) was often a major headache.

When the new RDEC and ERIS schemes came into force, many firms welcomed the change. For most companies, grants no longer complicate claims. However, it’s not all smooth sailing, as grants can still have a major effect on certain R&D claims.

We discussed these changes in our on webinar on 22 October 2025 — including what advisers need to know about NI ERIS and grants.

How do grants affect claims made under the old RDEC and SME schemes?

Under the old RDEC rules, grants have no effect on a claim, making it nice and straightforward.

It’s a very different story under the SME scheme. The rules here are complicated, and hinge on whether the grant is State Aid or non-State/De Minimis aid. It’s important to mention here that grants awarded pre-Brexit are unlikely to be State Aid as these rules changed after Brexit. Here’s a quick summary of how each type of grant affects an R&D tax relief claim under the pre-April 2024 rules:

If an R&D project receives any State Aid, all eligible R&D costs for the project must be claimed under old RDEC rather than the SME scheme

If a project receives any non-State/De Minimis aid, the amount of the grant must be routed through old RDEC and the remaining eligible spend can be claimed through the SME scheme

Although this seems simple enough on the surface, it can quickly get complicated when applied to real-life scenarios. Companies may be in receipt of multiple grants for a mix of R&D and non-R&D activities, making things difficult to untangle.

What’s changed under the new RDEC and ERIS schemes?

For most companies, the rules around grants couldn’t be simpler under the new RDEC and ERIS schemes – grants have absolutely no effect on these claims and can be ignored for the purposes of preparing claims.

However, for companies with a registered address in Northern Ireland, grants can still limit the amount of benefit received.

What are the rules for Northern Ireland?

Firstly, it’s important to state that NI companies that don’t meet the ERIS criteria are not affected by grants – they can claim through the new merged RDEC scheme using the same rules as all other companies.

NI companies that do meet the ERIS criteria need to look at several factors, including grants, to work out their available benefit. Quick reminder – the main differences between NI ERIS and new RDEC/ERIS is that overseas costs can be included without exemption, but the amount of available benefit is limited in line with de minimis aid rules.

This means that companies that have to claim through NI ERIS need to look at any de minimis grants received in the three years leading up to the submission of their R&D claim and check whether this amount, when combined with the net benefit of any previous NI ERIS claims, breaches the limit on de minimis aid given over three years – for most companies this is €300,000.

It’s key that Northern Irish companies and their advisers are aware of these restrictions and the need to keep robust records of grants received to ensure that all claims made for NI ERIS are compliant with both de minimis and R&D tax relief rules.

In summary

For most UK companies, grants no longer complicate R&D claims under the new regime – a welcome simplification after years of tangled SME scheme rules. But for Northern Ireland, grants still matter. Advisers supporting NI companies must carefully track funding and de minimis limits to ensure claims are accurate, compliant, and protected from challenge.

At WhisperClaims we know these kinds of nuances can be hard to stay on top of, which is why our new NI ERIS product, seamlessly integrated into our app, is available to guide firms through this exact process.

It’s just one of the many ways we’re supporting UK accountants to prepare robust, compliant claims with confidence.

Watch our webinar on demand

If you’d like to learn more, why not catch up on our recent webinar on demand from 22 October 2025 – “Grants don’t matter anymore… Except when they do: NI ERIS explained” , where we explored NI ERIS and the interaction with grants in more detail, plus our live Q&A.

Watch webinar

And as always, if your firm needs support, just get in touch.

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