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This article covers subsidised expenditure under the relief available to SMEs for accounting periods beginning before 1 April 2024. For accounting periods beginning on or after 1 April 2024, relief for R&D expenditure is available to SMEs under the merged RDEC scheme; see D1.417. SMEs which are loss-making and meet an R&D intensity condition can as an atlernative claim the R&D reliefs at D1.419 for accounting periods beginning on or after 1 April 2024.There are no equivalent restrictions for subsidised expenditure under the post-April 2024 reliefs and the legislation discussed in this article is therefore repealed.

For accounting periods beginning before 1 April 2024¹, the normal rule is that an SME cannot claim R&D relief under the SME regime for expenditure which is subsidised².

However, where certain conditions are satisfied, an SME may be eligible for relief for qualifying subsidised expenditure under the R&D expenditure credit (RDEC) scheme³. For details of RDEC, see D1.435A.