Top Tax Cloud FAQs
Since our inception, Tax Cloud has been inundated with questions from businesses looking to maximise their R&D tax credit claims whilst avoiding the hefty fees paid to consultants.
In our latest post, we highlight some of the top questions we get asked when customers enquire with us.
1) What are R&D tax credits?
If a company spends money on research and development activities, these activities may qualify for the R&D Tax Credit. The credit is calculated at 25% of qualifying expenditure and is used to reduce a company’s Corporation Tax (CT). Where a company has offset current and previous years’ CT liabilities, it may apply for a credit payable in instalments. Qualifying R&D expenditure will generate a 25% tax credit for offset against corporate taxes in addition to a tax deduction at 12.5%.
This means that companies undertaking qualifying R&D can claim a refund from the Revenue of €37.50 for every €100 worth of R&D expenditure. So, effectively, the R&D tax credit reduces the real cost of R&D by up to 37.5%.
2) Is my business eligible for R&D tax credits?
Many businesses don’t realise that they are undertaking eligible qualifying activities. It is not uncommon for their accountants to forget to tell them about R&D Tax Credits or even to tell them that they don’t qualify. If your technical lead (the R&D manager, lead engineer, or lead developer) is struggling to overcome the technical challenges of your project – if they are scratching their head wondering how to proceed, or losing sleep worrying about the technical uncertainties they face – your project will almost certainly qualify for R&D Tax Credits.
A company may qualify for the R&D Tax Credit if:
- It is within the charge of CT in Ireland
- It carries out qualifying R&D activities in Ireland or the European Economic Area (EEA)
- The expenditure does not qualify for a tax deduction in another country.
3) What counts as R&D?
The government’s definition of what is classed as research and development is relatively broad. The key phrase in their definition is that the R&D project must from the outset aim to make a technical advancement in a product, process or software over and above what is already available. The project needs to challenge your experienced team.
To qualify for the R&D Tax Credit, a company must carry out research and development activities that meet the following conditions. The research and development activity must:
- Involve systemic, investigative or experimental activities
- Be in the field of science or technology
- Involve one or more of these categories of R&D:
- Basic research
- Applied research
- Experimental development
- Seek to make scientific or technological advancement
- Involve the resolution of scientific or technological uncertainty.
No matter the size of your business, as long as your company is attempting the above then you could be carrying out an eligible R&D activity.
4) What costs qualify for R&D tax credits?
The main areas of costs that can be claimed are: -
- Employee/staff costs (gross pay, employer's NI and employer's pension contributions)
- Agency workers (externally provided workers)
- Employee secondment
- Royalty payments
- R&D carried on as part of an existing trade
- Consumable items (heat, light and power, and materials and equipment used or transformed by the R&D process).
5) How much could I claim?
To work out how much you could be eligible to claim, click here to use our free R&D tax calculator.
6) How does Tax Cloud work?
Tax Cloud works in 4 Easy Steps:
1) Sign up with your company name and we automatically verify your details.
2) Add your R&D projects, activities and costs in the Tax Cloud portal.
3) Myriad Associates (the creators of Tax Cloud) provide their specialist consultants to review and support your claim by providing feedback and recommendations
4) Tax Cloud takes your project descriptions and costs and creates the R&D tax claim report. Myriad will submit this report to Revenue on your behalf and answer any questions raised by Revenue.
7) Why would I use Tax Cloud rather than my accountant or a specialist?
Aside from the cost saving aspect, Tax Cloud has a whole host of features that benefit you and your business.
Tax Cloud Features include:
- Focused expertise in R&D claims
- Online service, no meetings
- Dedicated specialists in SME R&D claims
- Expert review of all aspects of a claim
- Quality service at a low fee
- No upfront fees
- No minimum contract period
- Xero Integration
8) How much does it cost to use Tax Cloud?
Visit our R&D Calculator to learn how much it will cost to benefit from Tax Cloud's expertly maximised R&D platform.
- No upfront fee
- No fee charged if you aren’t eligible
- Free amended CT600 as part of the claim process.
To book your free Tax Cloud demo, click here
- 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