7TH MAY, 2020

Irish Companies Can Now Benefit From Earlier R&D Tax Credit Payments

Now more than ever, finances are getting tighter. Businesses right across the Republic of Ireland are being impacted by COVID-19 and any money available needs to work harder. However, there is still an opportunity for your company to receive a timely cash flow injection in the form of an R&D Tax Credits claim.

Background

The excess R&D Tax Credit system means that companies located in the Republic can claim 25% back for every €1 spent on research and development. Those which don’t have a Corporation Tax liability in any given year can obtain a cash refund from Revenue instead, which is paid back across a three-year period in three instalments.

We’ve talked more about R&D Tax Credits later in this article, and you can also read up on our R&D Tax Credits page.

What are the new measures?

At the beginning of April, the State’s tax collector announced that they are expediting payment of R&D Tax Credit claims to free up thousands of euros in cash for Irish businesses during the COVID-19 crisis. The new measures essentially mean companies can receive their R&D cash instalments earlier, rather than having to wait until September.

Example:

A company with a year end of the 31st December 2019 is due to file its tax return by the 23rd September 2020 at the latest. However, it files early - in April 2020 - with an excess R&D refund due of ‘X amount’. This consists of R&D Tax Credits from the previous three years (the 3rd instalment that was due from 2017, the 2nd instalment due from 2018 and the 1st instalment from 2019). However, under these new measures Revenue will administer the refund immediately after filing, instead of waiting until after the 23rd September 2020 (subject to Revenue checks).

This represents a huge leap forward from the norm, as Revenue is only required by law to pay cash refunds up to nine months after an accounting period ends. Furthermore, this acceleration of payments will provide a healthy cash injection during this time, should businesses qualify for the scheme.

Apply using MyEnquiries

To request for Revenue to expedite any 2020 instalments of excess R&D Tax Credits, you’ll need to use MyEnquiries. It’s a secure online service designed to allow you to send and receive correspondence to and from Revenue. Additionally, you will also need to have filed your Corporation Tax return form (CT1) for the accounting period ending in 2019.

To make sure requests are processed in a timely manner, they will need to be appropriately tagged within MyEnquiries. To clarify, your enquiry relates to “Corporation Tax”, and “R&D instalments payable in 2020”.

R&D Tax Credits: A quick guide

Reading this has probably thrown up several questions, so the experts at Myriad Associates have put together all the answers you need when filing your R&D Tax Credits claim this month.

What are R&D Tax Credits?

In short, the R&D Tax Credit incentive was designed to encourage innovation and investment in research and development. It’s calculated at 25% of qualifying expenditure and is used to reduce a company's Corporation Tax bill. Claims must be made within 12 months from the end of the accounting period in which the R&D was undertaken.

Latest figures released in 2018 show the Irish Government provided businesses with direct R&D incentives totalling €751 million that year alone. However, some businesses don’t realise that they qualify for R&D Tax Credits, or that they are not claiming their full entitlement.

Who can apply for R&D Tax Credits?

Has your company undertaken innovative work recently? Then it may well be eligible for R&D Tax Credits, particularly if the project outcome was uncertain.

If you can demonstrate that your work goes beyond any technologies already in existence, then you may well be able to claim.

The three points below offer a good barometer for what fits an R&D tax claim:

  • Creating a brand new product, system or service
  • Modifying an existing product, service or system
  • Software made specifically to resolve an issue

A new problem, no matter how small the change, will be something that adds to the overall knowledge in your field and be eligible for R&D Tax Credits.

If you’re still unsure of your eligibility, you can calculate your savings and find out more by using the R&D Tax Credits Calculator.

How do businesses claim R&D Tax Credits?

Right now, it couldn’t be any easier or more accessible for any type of business.

Launched in 2017, Tax Cloud is a handy online portal that gives Irish businesses the ability to prepare their own claim exactly as if they were an R&D expert. Guiding you along the way, it ensures your claim is maximised - and at a much lower fee than traditional consultancy.

Applying this way during the current crisis is a potentially great option, as most consultancy based firms will charge substantially higher fees only to handle everything remotely anyway. Tax Cloud is easy to use and helps you put your claim together in four easy steps before creating the R&D tax claim report which is submitted to Revenue on your behalf.

What are the benefits of R&D Tax Credits?

In the here and now, a successful claim can provide your business with a significant non-repayable cash injection that will aid you during this difficult period.

In addition, however, once COVID-19 is a distant memory, it provides many small, medium, and large enterprises with the collateral to champion innovation and explore new development opportunities for your company that weren’t there before.

It is predicted that for every €1 spent on R&D Tax Credits approximately €2.40 in investment is injected into the Irish economy.

When do you need to apply?

The simple answer is as soon as possible.

Not only will this give your business a much needed cash injection, but the sooner you do it, the closer to the front of Revenue’s queue you will be.

Get in touch

Looking to discuss anything in this article? Perhaps you have questions about making an R&D Tax Credits claim and don’t know where to start. Call the Dublin-based Myriad Associates team for help on +353 1 566 2001 or use our contact form. We're working as usual during the COVID-19 outbreak and will be pleased to assist. Don’t forget to also take a look at our recent blog: What Advantages Does Tax Cloud Offer Irish Businesses?

Barrie Dowsett, ACMA, GCMA
Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud
Latest posts
28TH MAY, 2020 How To Protect Your Business From Cyber Security Attacks
22ND MAY, 2020 What Makes Tax Cloud Different From The Full Myriad Service?
14TH MAY, 2020 What's The Difference Between 'Invention' And 'Innovation'?
7TH MAY, 2020 Irish Companies Can Now Benefit From Earlier R&D Tax Credit Payments
30TH APRIL, 2020 10 Interesting Facts About Innovation And R&D Tax Credits In The Republic of Ireland
23RD APRIL, 2020 How To Reward Innovation In The Workplace
17TH APRIL, 2020 How Can 'Angel Investors' Help Innovative Irish Businesses Grow?
9TH APRIL, 2020 Key Innovations That Have Recently Come About In Ireland's Supply Chain
9TH APRIL, 2020 Tax Cloud Ireland - COVID 19 Update
3RD APRIL, 2020 Why Are Entrepreneurs Important?
26TH MARCH, 2020 What Effect Do Recessions Have On R&D Investment?
20TH MARCH, 2020 What Are The Main Types of R&D?
12TH MARCH, 2020 What's The Difference Between Open And Closed Innovation?
5TH MARCH, 2020 How Does Team Diversity Drive Innovation?
27TH FEBRUARY, 2020 What Advantages Does Tax Cloud Offer Irish Businesses?
20TH FEBRUARY, 2020 Overcoming Barriers In Scaling Up Your Business
13TH FEBRUARY, 2020 More Irish Businesses Than Ever Are Investing In Social Media Technology
7TH FEBRUARY, 2020 Tax Cloud Ireland Updates Pricing
23RD JANUARY, 2020 Innovation 2020: What’s It All About?
16TH JANUARY, 2020 Which Sectors Grew In Ireland Last Year?
7TH JANUARY, 2020 Top 5 Recent Agricultural Inventions
19TH DECEMBER, 2019 Do I Have To Spend My R&D Tax Relief On More R&D?
12TH DECEMBER, 2019 What Goes In To Planning An Effective R&D Process?
6TH DECEMBER, 2019 5 Major Areas Of Global R&D?
28TH NOVEMBER, 2019 How Innovations In Sustainable Living Are Hitting The High Street
21ST NOVEMBER, 2019 Irish SMEs Appear To Struggle More With Rising Costs Than Their Global Competitors
15TH NOVEMBER, 2019 Innovation In Your Irish Manufacturing Business: 5 Key Areas To Focus On
6TH NOVEMBER, 2019 Small Companies And Start-ups Get R&D Credit Boost Courtesy of Budget 2020
1ST NOVEMBER, 2019 How To Attract The Ideal People For Your R&D Project
24TH OCTOBER, 2019 Plan Your R&D Tax Credit Claim To Avoid A Last-Minute Panic
16TH OCTOBER, 2019 Why Should Irish businesses Use The Tax Cloud Portal For Their R&D Tax Relief Claim?
9TH OCTOBER, 2019 How Ireland Has Innovated: The Top 10 Irish Inventions The World Now Can’t Do Without
3RD OCTOBER, 2019 How The Rise Of Technology Has Affected R&D In Ireland
26TH SEPTEMBER, 2019 How Is Research And Innovation Supported In Ireland?
19TH SEPTEMBER, 2019 How R&D Could Be The Key To Post-Brexit Opportunities In Ireland?
12TH SEPTEMBER, 2019 How Can Irish Farmers Benefit From R&D Tax Credits?
5TH SEPTEMBER, 2019 What Are The Benefits Of Accountants Working With R&D Tax Experts?
28TH AUGUST, 2019 10 Biggest Issues Facing Small Irish Businesses Today
23RD AUGUST, 2019 What Deductions And Allowances Can Be Made Regarding My Corporation Tax?
15TH AUGUST, 2019 Are Only Big Businesses Eligible For R&D Tax Credits?
8TH AUGUST, 2019 Writing An Effective R&D Tax Credit Claim: Get The Technical Narrative Right
1ST AUGUST, 2019 How Can Irish Businesses Reduce Their Corporation Tax Bill?
26TH JULY, 2019 Top 10 Great Reasons To Start A Business In Ireland
19TH JULY, 2019 How Can Irish Businesses Boost Their Cash Flow Post-Brexit
12TH JULY, 2019 Growth Hack For Irish Businesses: Tap Into R&D Tax Credits
5TH JULY, 2019 What Projects Qualify For R&D Tax Credits In The Medical Industry?
1ST JULY, 2019 Why Use An R&D Tax Claim Portal Over An R&D Advisor?
24TH JUNE, 2019 Top Tax Cloud FAQs
21ST JUNE, 2019 Does Your Software Company Qualify For R&D Tax Credits?
Popular Tags
Start your Tax Cloud claim now Discover if you qualify and ensure your R&D tax claim is maximised. Get started
Powered by Myriad Logo

Myriad Associates helps businesses maximise tax credits and secure R&D grant funds. We specialise in R&D Tax Credits, Enterprise Ireland grants.

  • 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

Barrie Dowsett Barrie Dowsett ACMA CGMA Chief Executive Officer
David Farbey David Farbey MA, FISTC, FRSA Technical Consultancy Director
Lisa Waller Lisa Waller CTA, ACCA R&D Tax Manager
Lauren Olson Lauren Olson MA, MISTC Senior Technical Consultant