13TH JANUARY, 2021

Most common R&D questions asked by businesses in Ireland

Planning and funding R&D effectively

At Myriad Associates (the experts behind the Tax Cloud portal) we have years of experience behind us in research and development funding. We appreciate how important R&D is for all companies, regardless of size, and are advocates of effective innovation planning.

Throughout our time in business, we’ve also found that many of our Irish clients have similar questions when it comes to R&D and how to finance it. This is particularly the case with R&D Tax Credits.

With this in mind, we’ve put together some common queries together with their answers. And of course, if you have any questions of your own, please do get in touch with the Tax Cloud team.

What’s so important about R&D anyway?

Research and development is vital if a company is to survive and thrive long term. It’s the mechanism by which companies gain new knowledge that allows them to design, develop and enhance their products, processes or services.

Alongside expanding product lines, improving existing products and diversifying into new markets, investment in R&D can also streamline operations and reduce costs. Additionally, many investors are most keen to support businesses demonstrating a strong R&D programme. They’re typically attracted to dynamic companies on the hunt for the next big thing.

Don’t forget as well that companies engaged in innovative projects are often eligible to receive R&D Tax Credits and/or R&D Grants.

What are R&D Tax Credits?

Unveiled in the early 2000s, R&D Tax Credits are a Revenue-backed tax incentive scheme aimed at innovative Irish businesses. Designed to encourage company growth, it allows firms to claim back a substantial proportion of the R&D project costs they’ve incurred.

An incredibly popular scheme across the entire Irish Republic, the benefit is administered either as a reduction in a company’s Corporation Tax bill or as a series of cash payments.

A long as Revenue’s eligibility criteria are met, R&D Tax Credits are offered to companies within Ireland, or inside the EEA. The benefit is worth 25% of expenditure, on top of the standard rate of 12.5%. So in effect, up to 37.5% of R&D costs can be reclaimed. Yes it really is that generous!

What sectors most benefit from R&D Tax Credits?

Research and development occurs across just about every industry in every sector – and R&D Tax Credits are open to all of them. So forget about laboratories and people in white coats! R&D is most often in fact found in the last places you’d expect.

Having said that, we’ve found that R&D most commonly occurs across areas like assembly processes, regulation and quality assurance. These in turn are typically found in sectors such as construction, engineering, pharmaceuticals, healthcare, oil and gas, manufacturing, food production and many, many more.

If you would like to discuss your R&D plans and whether they would attract R&D Tax Credits, please feel free to contact our team.

What's involved in making a claim for R&D Tax Credits?

Here’s the rub; applying for R&D Tax Credits is far from easy. It’s a complex process, even for the most clued up of businesses and their accountants.

Whether a claim will be successful claims depends on a huge number of variables, and every claim is unique. Devising an application can be even more challenging when a firm’s R&D projects form part wider commercial operations. Additionally, criteria is likely to have been updated over time - and then of course there’s what to put in your technical report.

This is why using the Tax Cloud portal is so highly recommended, as it guides you through each stage and removes all the guess work. Find out more about how Tax Cloud works.

What is the deadline for filing a claim for R&D Tax Credits?

Revenue must have received an application for R&D Tax Credits within one year after the end of the accounting period when the R&D expenditure took place.

I’ve heard Revenue are hot on auditing in this area. Should I be worried?

Not if you’ve used the services of specialist R&D tax credit advisors such as those guiding you on Tax Cloud.

The fact is that R&D Tax Credit claims can be audited by Revenue up to four years after they’re awarded. Even if cash or credit has already been provided, Revenue is still within its rights to demand erroneous amounts are repaid. This is regardless of how innocent the mistake is, and interest and/or fines may well be added on top.

The key is not to panic. If Revenue raises further questions about your application this can be for a range of reasons. Often they simply carry out spot checks. But the best thing to do is contact Tax Cloud so we can give you some tailored advice.

I’ve got an excellent company accountant already. Can't they just apply for R&D Tax Credits on my behalf?

They can, and some accountants will do this for you. But many will actually shun the work, in the full knowledge that it’s complex, specialised and likely to take up huge time and resource. Furthermore, despite their competency generally, your business accountant may well not be familiar with the minutiae of R&D Tax Credit claims, what the latest application criteria is or where the pitfalls lie. And of course, they’re incredibly busy too. That’s why it’s well worth using the services of expert R&D advisors like us.

Why use the Tax Cloud portal?

Fully guided and supported by experts at Myriad Associates, the Tax Cloud portal is a fast, no-hassle way to make a fully optimised R&D Tax Credits application online. Free to sign up and use, it’s an outstanding value alternative to the full Myriad service. Cloud-based and with support on hand at every stage, it’s perfect for companies in Ireland with more straightforward tax affairs or those who have claimed before. Don’t risk a Revenue enquiry by going it alone.

Try the Tax Cloud portal now or call us on +353 1 566 2001. Our contact page is also available if you would like to send us a message.

Barrie Dowsett, ACMA, GCMA
Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud
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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