How R&D Could Be The Key To Post-Brexit Opportunities In Ireland?
The uncertainty surrounding Brexit continues to present some significant challenges to the Irish economy, with certain sectors such as food and agriculture looking especially vulnerable going forward. Whether it’s about maintaining food supply, scouting out opportunities for growth or managing the hard times, innovation is vital for success. And this requires plenty of investment in research and development.
Brexit is indeed a massive challenge like we’ve never seen before. If we consider the prepared foods sector for example, it could be the case that processed foods imported from the UK are impacted by the UK’s EU departure. Therefore if any import substitutions can be made, or new supply chains created post-Brexit, Irish businesses will need to be ready for it. R&D will play a massive role in this.
Of course, where there are challenges there are silver linings too. Once the UK has left the EU, Ireland could well see a spike in talented researchers wishing to come here, keen to remain working within the EU. Plus of course they would also then be eligible for a share of Ireland’s €80 billion Horizon 2020 research budget. Prior to Brexit, the same researchers may simply have headed to the more obvious centres like London, Cambridge and Oxford - but potentially, not any more.
Attracting the best talent
The belief is that, if managed properly, the Irish Republic can attract some incredibly talented individuals across multiple industries and disciplines. In no small way, Brexit is likely to level the playing field when it comes to attracting talent from across the world.
SFI is also working to develop a shared PhD student scheme that will offer funding to 120 PhD students to spend half their time in the UK. The UK with then reciprocate by funding the same number of students to spend half their time in Ireland. Not only is this a great opportunity for the students involved, it provides a robust way of keeping research channels open between the two countries against the backdrop of such uncertainty.
Despite this positivity, it’s still abundantly clear that Brexit is, at least in the short term, going to throw up more questions than it answers. The other big consideration is its impact on the commercial R&D landscape which is equally unpredictable. Depending on Brexit’s final outcome, the UK government may well look to improve their already competitive intellectual property exploitation regimes and R&D tax incentives. Ireland therefore needs to keep its finger on the pulse, and respond nimbly to changes both in legislation and competition as they arise. Additionally, Ireland should watch closely to see what impact Brexit might have on direct foreign investment with regard to R&D. It is hoped that the country will attract a greater share of FDI, from America in particular, where hi-tech companies may be on the hunt for a business-friendly base within the EU.
How can R&D Tax Credits help?
With such a large amount of change on the near horizon, it’s more important than ever that Irish businesses look ahead and make plans now. By developing and innovating, companies stand a much better chance of not only thriving but prospering after Brexit.
For many years now - even before Brexit was ever heard of - the Irish government has been keen to support innovation and growth. This has particularly been the case with regard to advances in science and technology. Not only does innovation benefit the company itself but means a boost in jobs and revenue that’s good for the wider economy in Ireland and beyond. This is why it launched the R&D Tax Credit scheme.
So what is R&D Tax Credit?
The R&D tax credit scheme is a very popular tax-based incentive that was created to encourage investment in R&D by companies across Ireland.
The credit offers Irish companies up to 25% of their R&D expenditure (both capital and revenue) by way of a tax credit or as a lump sum cash injection (subject to the eligibility criteria being met). The good news too is that the 25% credit can be claimed in addition to the 12.5% Corporation Tax deduction applied at the standard rate.
R&D Tax Credits are usually available for innovative projects that are carried out across a broad spectrum of areas in science and technology, such as engineering, medicine, financial services, software development, food and beverage production, pharmaceuticals, agriculture and horticulture.
Why is it important that applications for R&D Tax Credit are completed correctly?
The application process for claiming R&D tax relief is notoriously difficult, involving a large number of questions and documents. Get it wrong, and at best you’ll receive either less or no money – and at worst, Revenue could launch an enquiry into your tax affairs that could land you in hot water. Expensive and most unpleasant.
Although your company accountant is likely to be able to assist you with some aspects of it, we highly recommend using the services of R&D tax experts such as ourselves. We know the full process in detail and will assist you in not only making an effective application but in giving you the best chance of it being accepted.
How can the Tax Cloud help?
Submitting a successful R&D Tax Credit claim to the Revenue is often a complex process and mistakes can be very expensive.
Whilst many accountancy firms have some dealings with R&D tax reliefs, here at Tax Cloud (part of Myriad Associates), we specialise entirely in the R&D claims field. This means we can offer the very best, up-to-date guidance so you can be safe in the knowledge that everything is as it should be.
Also don’t forget to try the Tax Cloud calculator. With sections for both businesses and accountants it’s a handy tool designed especially to show companies in the Republic of Ireland what R&D Tax Credits they can claim.
For more information or further advice, feel free to call us on +353 1 566 2001 or use our contact page and we’ll get right back to you.
- Submitting R&D tax claims since 2001
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