IAS21948 Business Tax- 25.2/25.3 R&D calculation incorrect (19% and not 25%) FIXED

business-tax-25-2-25-3-rd-calculation-incorrect-19-and-not-25

IAS21948 Business Tax- 25.2/25.3 R&D calculation incorrect (19% and not 25%) FIXED

1st October 2025

NOTE: If you are now on IRIS Version 26.1.0 or later and you believe the calculation is still incorrectly calculated at 19% and it should be 25%. Our Development team has checked and that you run the Tax comp – if the ‘Profits chargeable to Corporation tax is NIL’ then therefore it is calculated at the correct 19% and following HMRC rules.

IRIS has raised a issue where the R&D % rate being charged is incorrect. It is charging it at the incorrect 25% rate, because the profits are over £50,000 after the R&D has been entered then it should be at a correct rate of 19%, based on the HMRC rule: –

Notional Tax Calculation feature where the Notional Tax withheld is calculated based on the appropriate tax rate for each company’s chargeable profits. For loss-making companies the system utilizes the Small Profits Rate of 19%

As it affects version IRIS versions 25.2 and 25.3, the IRIS Development team has released a fix in version 25.4 in early November 2025. There is no workaround.

Our apologies for the inconvenience.