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Change of status to and from SME for R&D relief

Year of grace

The R&D tax relief available to a company is dependent on whether the company is an SME or a large company. This is the case both for accounting periods beginning on or after 1 April 2024 and for earlier periods. Only SMEs can make a claim for relief by way of additional deductions, enhanced pre-trading losses and R&D tax credits. From April 2024, the SME must be loss-making and must satisfy an R&D intensity condition. Large companies can only claim RDEC. From April 2024, SMEs can claim RDEC whether or not they meet the conditions for the SME-only reliefs. Previously SMEs could claim RDEC only for certain expenditure excluded from the SME reliefs. For more on RDEC see D1.417 (from April 2024) and D1.435A (earlier periods). For more on the SME-only reliefs see D1.419 (from April 2024) and D1.420 (earlier