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R&D Tax Credits: Which Irish companies can apply?

Many businesses don’t know they're undertaking eligible qualifying activities, but even the smallest claims can run into thousands of euros. And the best bit? Any company in Ireland can apply.

Barrie Dowsett

Chief Executive Officer


8 minute read

Run, own or manage a business in Ireland? It’s possible that you haven’t considered R&D Tax Credits or wrongly thought your company’s area of activity didn’t qualify. It’s also easy to assume that only companies working in industries that are explicitly scientific, such as robotics or pharmaceuticals, can apply. But this is in fact far from being the case.

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.

What are R&D Tax Credits?

R&D Tax Credits are offered as an incentive to promote innovation across the Irish economy, and various schemes are on offer. In particular, the rates of credit are different for large companies (in general, those with more than 500 employees) and for small and medium-sized enterprises (SMEs). The best way to make sure you apply to the right scheme and maximise your company’s claim is to work with a specialist adviser.

Thousands of businesses - large, medium and small - have already received generous R&D Tax Credits directly from Revenue. What’s more, your company could receive cash relief for projects worked on from as long as two years ago - right up until its next corporation tax payment is due. And loss-making companies can even claim too.

Check out our R&D Tax Credits page for more information about the scheme and the process for claiming.

Is your company missing out on a significant cash incentive from Revenue?

It could be if you haven’t considered your company’s possible eligibility for R&D Tax Credits.

It’s possible that you haven’t considered R&D Tax Credits for your company because you thought your company’s area of activity didn’t qualify. You may have thought that only companies working in industries that are explicitly scientific, such as robotics or pharmaceuticals, can apply. You’d be wrong.

The guidelines for research and development tax credits published by Revenue don’t impose any restriction on the type of work your company does, but instead, they explain what sort of activities qualify. That means that if your company is working on advancements in any field of science or technology you may be eligible for R&D Tax Credits.

Technical uncertainties

Does your technical team have ‘head-scratching’ moments?

In order to qualify for R&D Tax Credits, you need to show that your company’s team of experienced professionals is working on a project that involves tackling a scientific or technological uncertainty. Typically this occurs when a member of the technical team has struggled to overcome a technical challenge. It’s also important that at the start of the project your intention is to make an overall scientific or technological advance, and not just an advance in your company’s knowledge. However, there is no restriction on the industry in which you work.

Examples of projects that would qualify for R&D Tax Credits

If your company undertakes any of the following activities, you will most likely be eligible for R&D Tax Credits:

  • Manufacturing and Engineering
  • Designing and developing cost-effective and innovative operational processes;
  • Integrating new materials to improve product performance and manufacturing processes;
  • Evaluating and determining the most efficient flow of material;
  • Developing processes that would meet increasing regulatory requirements;
  • Streamlining manufacturing processes through automation.
  • Innovative product development using computer-aided design tools;
  • Development of second generation or improved products;
  • Designing, constructing, and testing product prototypes;
  • Tooling and equipment fixture design and development;
  • Developing unique computer numerical control programs;
  • Designing innovative programmable logic controllers;
  • Designing innovative manufacturing equipment design;
  • Prototyping and three-dimensional solid modelling.
  • Software
  • Tools to extend the functionality of application software programs or of an operating system;
  • Extensions to database software, programming languages, or operating systems;
  • Software development tools, such as tools to port data across platforms, tools for image processing or character recognition;
  • Novel data management techniques, such as new object representations and new data structures;
  • Innovative methods of capturing, transmitting, manipulating, and protecting data;
  • Software to run new computer hardware;
  • Software to run on devices with pre-installed operating systems, such as handheld GPS, mobile phones, and tablets;
  • Means of integrating hardware and software platforms.

Think your company may be eligible for R&D Tax Credits?

The massive benefit of R&D Tax Credits is the fact it’s so generous. But the downside is that putting together a claim that meets Revenue’s strict criteria is far more difficult.

Knowing exactly which of your project costs are eligible - and which aren’t - is far from straightforward. Adding costs to your claim that won’t qualify will attract the attention of Revenue inspectors and could lead to an enquiry into your wider tax affairs. But by unwittingly leaving off costs that are eligible you’re also leaving potentially thousands of euros on the table. And that’s cash that could be spent on anything, including further innovative work.

Then of course there’s your R&D technical report. Not only does it need to be written in such a way as to explain the technical and/or scientific challenges the project addressed, but also make the case to Revenue as to why you believe your project is eligible. No easy task.

The sheer complexity of claiming for R&D Tax Credits means that the majority of claimants will use the services of a specialist R&D tax consultancy like Myriad Associates.

Essentially, when you come to us, we’ll start off by making sure your project - and your costs - definitely qualify for R&D Tax Credits. We’ll then sit down with your team and work to understand your company and your claim so we can then go away and create a watertight claim that is successful first time.

It doesn’t even matter where in Ireland your company is based. Our team work entirely remotely so you don’t even need to leave your desk.

If you would like to find out more, take a look at our R&D Tax Credits webpage or call our team on +353 1 566 2001. Alternatively send us a message and we’ll call you back.

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