Investing in your future through the R&D Tax Credit programme
Research and development is critical to the success of the Irish economy, its jobs and its place in the world. Ireland offers a range of different incentives for companies carrying out research and development (R&D). However, not all are aware of the benefits of this credit, and of how important it can be to maintain their competitive edge in the world, writes Ghazaleh Hashemian, Business and Technical Manager with Braithwaite Ireland.
What are R&D Tax Credits?
The government introduced the R&D Tax Credit scheme in 2004 for Irish companies to invest more resources in R&D and drive innovation. The scheme provides 25% tax back on research and development expenditure, in the form of credit against corporation tax and/or as a cash refund.
What type of R&D activities are eligible?
There is a misconception that research and development can only take place when you have a dedicated team and/or lab facility – the idea of men and women in white lab coats. In reality, many of the companies that are taking advantage of the programme have qualifying R&D expenditure because a portion of their operations is dedicated to innovation. The expenditure used to further develop or advance a product or service could be claimable.
What type of expenditure is claimable?
Expenditures can include salaries, subcontractors (i.e. contractors performing R&D in the European Economic Area, consumed materials, machinery, equipment, and overheads). The credit is claimed on qualifying expenditure in respect to the amount spent on R&D activities in the fiscal accounting year.
Who can take advantage of the programme?
The credit is available to trading Irish-based companies for R&D activities carried out in a wide variety of science and technology areas, including information technology, engineering, software development, medical devices, pharmaceuticals, agriculture, and food processing.
Does the opportunity expire?
Yes, the opportunity expires 12 months from the end of your fiscal year. For example, if the accounting year-end is 31 December 2018, the company has until 31 December 2019 to submit a claim for the 2018 fiscal year. Braithwaite recommends filing with CT1 and not as a later amendment.
The Braithwaite Experience
As Braithwaite solely works on the R&D Tax Credit, we offer a wide variety of services. These services are:
- Reviewing active projects and processes
- Developing or implementing information capturing systems
- Gathering information for technical report and financial reports
- Drafting technical and financial reports
- Revenue/audit support
To find out if you are eligible for the tax credit, call or contact our Business and Technical manager for a free assessment.