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Top 10 R&D Tax Credits Questions Asked By Businesses In Ireland

In this blog, we’ve put together a list of the most common R&D tax credit questions and answers.

Barrie Dowsett

Chief Executive Officer


5 minute read

R&D (Research and Development) Tax Credits are a Revenue-backed tax incentive scheme launched in the early 2000s. Designed to encourage businesses to engage in innovative activities, it helps to cover the costs involved in such innovation. A highly popular scheme across the whole of Ireland, it’s available either in the form of a reduction in a company’s Corporation Tax bill or as a lump sum credit.

Applying for R&D Tax Credits is not always straight-forward though. There’s a very specific process to go through where companies have to not only inform Revenue of what R&D activities took place, but why they believe they’re eligible – with documentary evidence to back it up.

The choice regarding whether to tackle your company’s R&D Tax Credit claim yourself or to use the services of experts like ourselves is entirely up to you. However, because of the complexity of the application and the costs involved in getting it wrong, we highly recommend you speak to the professionals.

At Myriad Associates we have years of experience in all aspects of R&D tax relief and can guide you through the process as smoothly as possible. We’ve also found that many of our clients in the Republic of Ireland have similar questions when it comes to claiming R&D Tax Credits and what they’re all about, so we’ve put together a list of the most common ones together with the answers. Hopefully they will clarify things for you, but if you would like some further support and advice our details are at the bottom of this article.

What is the Research & Development (R&D) Tax Credit for Ireland?

The Tax Credit is available to companies engaged in eligible research and development either within Ireland or elsewhere in the European Economic Area. It’s worth 25% of expenditure and can be used against a company's Corporation Tax liability or as a cash refund.

Is my company eligible for R&D Tax Credits?

If R&D has taken place then yes, very likely. It covers a massive range of sectors – forget white coats and laboratories!

R&D activities are likely to take place across assembly processes and manufacturing operations, regulatory certification, quality assurance and business services. These in turn could be within Financial Services, Technology, Machinery, Building and Construction, Oil and Gas, Mining, Generic Pharmaceuticals, Utilities, Food, Automotive, Engineering and more.

If you are unsure if your business is eligible for the R&D Tax Credit, please do get in touch to discuss.

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

Successful claims hinge on a large number of factors and it’s vital a company does exactly as Revenue requires. Preparing a claim can become especially difficult when a company’s R&D projects are part of broader commercial operations. Additionally, certain data could well have changed over the period in question, or is just very difficult to extract.

Our dedicated team is well versed in building your claim and can work with your company’s specific costing systems. Please do get in touch to discuss.

Will preparing a claim take up a lot of my time?

Preparing a strong R&D Tax Credit claim is likely to be labour intensive. It requires in-depth evaluation of activities with key technical/scientific staff, as well as an understanding of all the costs involved so that your company’s claim is maximised. Again, it’s well worth using the services of a professional team such as ourselves, so that your claims process is as fast and as smooth as possible.

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

Claims must be submitted to Revenue within one year from the end of the accounting period during which the R&D costs were incurred.

What is an R&D Tax Credit audit, and what does it involve?

This is where Revenue examines whether the current R&D Tax Credit regulations have been adhered to. It is a methodical way of reviewing claims from both a technological/scientific as well as a financial perspective.

For a company to qualify for R&D Tax Credits, it must meet the requirements of the following two tests as part of the audit:

  • The Accounting test: Are the costs included in the claim correct? Has the company kept detailed records of expenditure incurred during the R&D activities? (This test is usually carried out by a Revenue inspector).
  • The Science test: Are the R&D activities themselves consistent with the statutory definition of what can be claimed for, and is all the supporting documentation present? (This review is usually undertaken by a technical expert that the Revenue will appoint).

Why does an R&D audit matter if I have already received my credit/cash refund?

R&D Tax Credit claims may be audited by Revenue for up to four years after a return has been submitted. Although many claimants believe that once they’ve received their Corporation Tax deduction or lump sum payment then all is well, but this isn’t always the case. It’s important for companies to realise that their claim is generally not accepted by Revenue until its auditing process is completely finished.

Revenue has contacted me to ask further questions - am I in trouble?

No, not at all. If Revenue is looking to ask you some further questions about your claim this can be for any number of reasons. Sometimes they even do random checks. The most important thing is you answer their questions as accurately as possible, and if you’re still concerned give us a call.

What are the potential implications of an R&D Tax Credit audit?

The assessment of a company is based entirely on the claim it has made, so if Revenue finds any overstatements or inaccuracies, or there are any questions over the documentation, companies may face having to repay some or all of their tax credit back. Additionally, Revenue may ask for interest and penalties and, in extreme cases, companies could risk publication.

Can't my accountant just apply for me?

Some accountants will help you complete your R&D Tax Credit claim but others shun the work because it takes up a lot of time and resource. In reality, accountants are busy and have a broad range of tasks they need to complete in a day - how can you be sure you’re getting exactly the right advice when it comes to R&D specifically? That’s why we recommend using an R&D expert such as ourselves.

Why choose Myriad Associates?

With offices in both Dublin and London, Myriad Associates consists of highly trained, expert teams in all areas of R&D tax relief across Ireland and the rest of the UK. Whether your business is just starting out or you’re already set up and growing, our friendly staff will offer the holistic approach you need. Call us today on +353 1 566 2001 or use our contact page.

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