The classification of a company as a SME or large enterprise depends on the overall turnover of the company and the number of staff members.
A company moves from the SME to RDEC scheme for R&D tax claims when it passes the threshold for consideration as a SME (mainly turnover and number of staff members) for two consecutive years.
The first year that you grow past the SME qualification parameters is called a ‘year of grace’ and your company status will remain the same for that year. This can be very beneficial to you financially, because the SME R&D tax scheme is far more generous in how much it pays you than the RDEC scheme.
There are cases where an SME will claim under a combination of the SME and RDEC schemes, such as State Aid grants
R&D consultants can help you understand your situation and how to get as much R&D tax credit as possible back in spite of a changes to your company status