Plan Your R&D Tax Credit Claim To Avoid A Last-Minute Panic
Research and Development (R&D) Tax Credits can offer a sizeable cash injection to Irish businesses that qualify, and just about all innovation work could be in the running. Launched in the year 2000, R&D Tax Credits are a Revenue-backed tax incentive to help companies meet the costs involved in innovation and growth. The government has long recognised that companies engaging in a range of innovative activities not only make themselves more competitive, but boost the economy as a whole through investment and job creation.
Has your company undergone R&D work lately? Then time is of the essence. While R&D Tax Credit applications can be made within 12 months from the end of a tax year, we recommend completing the claim over the course of the year in real time. This then avoids a rushed, last-minute exercise in data gathering and panicking about getting your submission in on time. We also suggest regarding the process as a set of stages, so that information can be collected and processed in a timely fashion.
What is the Revenue’s R&D Tax Credit scheme?
The Research and Development (R&D) Tax Credit scheme is open to all Irish companies that have recently undergone - or are undergoing currently - innovative projects either in Ireland or inside the European Economic Area. This sounds pretty broad, and it is - providing that there has been some element of scientific or technological advancement involved.
The scheme provides a 25% tax credit against a company’s bill for Corporation Tax, over and above a tax deduction of 12.5%. This effectively means an accepted R&D tax relief claim can generate a refund of €37.50 per €100 worth of R&D expenditure. In essence, R&D Tax Credits actually reduce the real cost of R&D by as much as 37.5%.
How Irish companies can qualify for R&D Tax Credits
To be eligible for the R&D Tax Credit scheme, a company’s R&D work must meet a number of criteria, namely that the R&D:
- Involves experimental, investigative or systemic activities
- Attempts to make a scientific or technological advancement
- Is in a technological or scientific field
- Requires experimental development or basic or applied research
- Aims to resolve a specific scientific or technological uncertainty.
How does an R&D Tax Credit claim stand the best chance of success?
The application process for R&D Tax Credits is notoriously difficult. There is a large amount of data gathering and explanation required, and it has to be done exactly as the Revenue requires. Getting it wrong will, at best, mean your claim is unsuccessful and at worst could land you in serious tax-related hot water.
This is why we strongly recommend you talk to the team at Myriad Associates before you begin. We are experts in R&D tax relief and have years of experience in how to generate a successful claim.
Here we have divided the claims process into several distinct stages to explain more about how we work.
Step One: Looking over active projects and current processes
Our first step is to ensure your team fully understands all of Revenue’s guidelines and how they relate to your company’s way of working. This means looking closely at your existing processes, tracking systems and organisational tools particularly. In doing this, we can be objective about the R&D work that’s going on and determine whether it qualifies for R&D Tax Credits and what the realistic chances are of a successful claim. It also determines the best, most efficient way of gathering the required financial and technical information.
Step Two: Collecting data together for technical reporting
Next we work with you in developing a plan for capturing the information the Revenue requires for supporting your application from a technical perspective. Our team can recommend the best ways to capture internal technical information if there isn’t any to hand, or put forward suggestions to enhance the current process. Based on further technical discussions with you, we will then obtain the information we need for writing a technical report. This report will describe the R&D work carried out and why we believe it qualifies for the relief.
Step Three: Project costing
So now we’ve done the technical part. Next we need to capture the information necessary to support your claim from a financial perspective.
We will ask to meet with your company’s finance lead in order to have a detailed discussion and develop a plan for obtaining the financial information required for your claim. We can then work to compile financial/expenditure information based on the selected R&D work in an itemised report that shows qualifying costs per project in the very best light.
Step Four: Review of information before submission
Once the information for both the technical and financial reports have been compiled they will need to be reviewed fully by the key members of staff involved to check for accuracy. This step is crucial before submitting and if anything has changed at this point we can work with you on any adjustments. Once everything is checked, submission of your application can take place. This should be well in advance of the deadline so that it will be received on time.
Step Five: After submission
With Revenue audits on the increase, it is vital that businesses allow enough time for everyone involved in the application process to put everything together exactly according to the Revenue’s latest guidelines. If the Revenue is not happy with any aspect of your claim, or the calculations within it, it will ask further questions or even open an audit which is best avoided at all costs.
How can the Tax Cloud calculator help?
Whether you’re brand new to the world of R&D Tax Credit claims or you’ve been working alongside us for years, we’re here to offer help and advice when you need it.
The team at Myriad Associates is made up of a comprehensive mix of highly skilled R&D professionals, including tax specialists, accountants and advisors. There’s very little we don’t know, having worked with a large number of clients across Ireland as well as the UK.
- Submitting R&D tax claims since 2001
- 100% success rate
- Over €100m claimed and counting
- Industry leading specialists
- In-house technical, costing and tax experts
- Member of the Research and Development Consultative (RDCC) committee
Meet some of the team behind Tax Cloud