Yasmin Dalton
Consultant
HMRC has recently updated its guidance under section CIRD125000, which relates to Enhanced R&D Intensive Support (ERIS) for small and medium-sized enterprises (SMEs) with a registered office in Northern Ireland. This article summarises the changes and provides an overview of the CIRD125000 guidance.
Key updates include the removal of transitional processes, corrections to EU de minimis State aid regulations, and clearer rules for linked enterprises, group companies, and sector-specific aid thresholds.
The Finance Act 2025 introduced provisions specifically for loss-making, R&D-intensive SMEs in Northern Ireland. These changes apply to claims made on or after 30 October 2024.
To qualify for NI ERIS, a company must:
Eligible companies are not subject to the restrictions on relief for spending on overseas contractors or externally provided workers. However, they are subject to a three-year de minimis State aid limit. Any claim that exceeds this limit must be made under the R&D Expenditure Credit (RDEC) scheme. Making overseas subcontractors eligible could be highly attractive if overseas subcontractors are a large part of a company’s R&D activities, for example, often seen in software development, making it far more attractive to have an NI-based registered office.
Companies that do not carry out any trade in goods or electricity-related activities may opt out of the NI-specific ERIS and be treated under the standard UK ERIS rules by notifying HMRC under section 1112J of CTA 2009.
The most noticeable change in the updated guidance is the removal of references to HMRC’s interim processes and the expected launch of the additional information form. The previous guidance acknowledged that new functionality was still in development. In contrast, the new version assumes the full process is now operational.
There have also been corrections to EU regulation references. The updated guidance now correctly cites current legislation relating to de minimis aid, such as Commission Regulation (EU) No 2023/2831 for general de minimis aid and updates to the regulations applicable to agriculture and fisheries.
The updated version also simplifies the structure, removing provisional wording and references to HMRC potentially contacting claimants manually. Instead, the guidance now states that HMRC will issue a State aid notification once a valid claim is received.
NI ERIS qualifies as de minimis State aid. There is a cap on how much aid a business, including its wider group, can receive over a three-year period. This cap is €300,000 for most sectors. For companies in agriculture, the cap is €50,000, and for those in fisheries and aquaculture, the limit is €30,000.
These limits apply to the “single undertaking,” which includes all linked enterprises, such as parent companies or subsidiaries. The company must calculate the total aid received in the current and two preceding accounting periods and declare that the de minimis threshold has not been exceeded. This includes aid received under other schemes and from other group companies.
The benefit of a claim is measured as the difference between the ERIS claim and what the benefit would have been under the RDEC scheme. A formula is provided in the guidance for calculating this “additional benefit” amount.
If a company believes the cumulation of de minimis aid across sectors (such as agriculture and fisheries) negatively impacts its ability to claim ERIS, it can contact the HMRC R&D policy team.
If a claim under NI ERIS would result in the business exceeding its de minimis threshold, the excess expenditure may still be eligible under the RDEC scheme. Companies must ensure they understand which scheme applies to each part of their claim and monitor the aid received across the wider group.
The updated CIRD125000 guidance for NI ERIS brings structure to the rules introduced by the Finance Act 2025. The claim process has been formalised, and supporting documentation requirements are clearly set out. Northern Ireland SMEs now have more certainty in how to access enhanced R&D support while ensuring compliance with State aid rules.
Companies should assess their eligibility carefully, track aid received across their group, and ensure their claims remain within the applicable limits. Where there is any doubt, professional advice or direct contact with HMRC’s R&D policy team is recommended.
Understanding the details of ERIS, State aid limits, and eligibility rules can be complex, especially for companies with group structures or activity across multiple sectors. TBAT Innovation works with SMEs throughout the UK to make the process straightforward and ensure that R&D claims are accurate, compliant, and optimised.
We can support you by:
If you’re unsure whether ERIS or RDEC is the better fit, we can guide you through that decision and help structure your claim to make the most of both schemes where possible.
With changing R&D guidance and strict compliance rules, having a trusted R&D tax specialist on your side, like TBAT Innovation, ensures your R&D tax claim is submitted with confidence and that you avoid costly errors.
For the full CIRD125000 guidance, visit: CIRD125000 – R&D Tax Reliefs: reformed reliefs: ERIS: companies registered in Northern Ireland – HMRC internal manual – GOV.UK
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