Seed Funding In Ireland Gets €10 Million Boost From Government
Supporting Ireland’s innovative SMEs
Extra funding is now on offer to support seed investment in Ireland, especially aimed at start-ups and early stage businesses who are struggling with COVID-19 uncertainty.
Originally, funding for the scheme was set at €175 million after a pledge was made in the July stimulus package. But now the Enterprise Ireland Seed and Venture Capital Scheme has an additional €10 million in the pot, allowing more companies hit hard by the pandemic to receive venture capitalist backing.
The Irish government has made it clear that driving innovation is the key to the country’s success now more than ever. The July stimulus also promised a €25 million investment in the life sciences sector, €10 million for a New Green Enterprise Fund and further supports for organisations that wish to boost their presence online. On top of this again, last month the €5.5 million COVID-19 Online Retail Scheme was launched. The scheme means that retailers can receive grants of between €10,000 and €40,000 to bolster their e-commerce provisions and to fund new digital strategies.
Venture Capital investment is high in Ireland - but seed financing has been lower
Recent data shows that start-up funding in Ireland rose to €363.8 million during the second quarter of 2020. This represents an impressive 58% year-on-year increase, shoring up Ireland’s reputation as a strong player in global innovation. However, start-ups are still struggling to access the support they need, particularly if they haven’t received funding before.
It’s clear that this year and next year are going to be extremely challenging times for businesses, even though there are robust funding options out there. With this in mind, the additional €10 million tranche of funding under the Seed and Venture Capital Scheme is welcome, helping new businesses to meet these challenges.
Over the coming winter, the Government is also looking to set out a National Economic Plan to act as a roadmap for a long-term recovery lead by a buoyant jobs market.
More information and how to apply
More details can be found, including how to apply, by downloading the Seed & Venture Capital Scheme 2019-2024 Guidelines.
For start-ups and businesses on the grow, there’s also R&D Tax Credits
Although there are a number of shorter term COVID-19 supports being offered by the Irish government, business innovation has been high on the agenda for a long time.
Back in the early 2000s, the Irish government unveiled the very popular (and generous) R&D Tax Credits scheme to help companies pay for the costs of innovative activities.
How does it work?
R&D Tax Credits can be claimed by any Ireland-based company that has undergone a project which seeks to advance science or technology in some way. This can be something fairly small, or a much larger piece of work; but as long as it benefits the field in which the company operates (not just the company itself) then R&D Tax Credits may well be available.
Notably, companies can apply to receive up to €37 back for every €100 of R&D expenditure they make (we told you it’s generous!)
Once a successful application has been made, the benefit is offered either as a reduction in a company’s liability for Corporation Tax or as a lump sum payment for those making a loss.
This is just for big pharmaceutical companies - isn’t it?
No not at all! In fact this is a common misconception.
R&D Tax Credits are open to any Irish company in any sector or industry, and of any size. Most eligible projects involve a company creating a brand new product, process or service from scratch. Many others take a product that already exists and substantially improve it in some way, for example by improving the taste of a particular food or drink. Expansion of a product line is also a good example.
Great, so how do I apply?
This is the tricky bit. Applying for R&D Tax Credits (and R&D Grants for that matter) is far from straight-forward. Revenue need to effectively be persuaded that the project should attract the award, and a clear case put forward.
Essentially all the eligible costs need to be identified (which in itself can be difficult as it’s easy to miss some out so your claim won’t be maximised). Then a narrative report should be submitted alongside the figures that not only explains the background of both the company and the project but that also clarifies why you believe your application should stand. Revenue guidance and criteria change regularly in this very niche tax area, and it’s all too easy to make a mistake or even have your claim rejected altogether. Plus, if your claim is submitted and there are any mistakes, Revenue inspectors are pretty much guaranteed to find them and raise an enquiry. These enquiries are stressful, time consuming and potentially hold up your claim at best. At worst, they could lead to an investigation into the company’s wider tax affairs, as well as fines or other sanctions. Certainly best avoided - which is why companies work with R&D tax and funding specialists like us.
How the Tax Cloud portal makes claiming easy
The Tax Cloud portal was launched back in 2017 and is owned by the R&D funding experts at Myriad Associates.
Offering outstanding value, Tax Cloud is - as the name suggests - a cloud-based portal that be accessed on any internet connected device. It’s free to sign up, and once you’re logged in you simply follow the steps to make a hassle-free, accurate R&D Tax Credits claim that stands up to Revenue scrutiny. You can work through it at a time and pace to suit you, and our specialist team of R&D accountants and advisors are on hand if you need advice at any point.
- Submitting R&D tax claims since 2017
- Strong track record delivering R&D tax credit claims
- Over €10m claimed and counting
- Industry leading specialists
- We employ technical, costing and tax experts
- Confident of delivering value to our clients, we offer our R&D tax services on a success fee-only basis.
Meet some of the team behind Tax Cloud