R&D tax credits

Innovation, technological progression and forward thinking are prioritised across the business and political landscape in Ireland. This is epitomised by the goal of Ireland Impact 2030^[1] to increase R&D spending from 2.0% of GNI in 2020 to 2.5% by 2030. The Irish government is targeting business expenditure for R&D to double before 203O and supports this growth through generous incentives for companies that invest in innovation.

It is important for companies to stay in touch with the many recent changes to the R&D tax credit scheme and how Irish Revenue is approaching its role as gatekeeper.

Along with the well-established successes within life sciences, food, nutrition and technology, Ireland has the opportunity to become a world leader in offshore wind, storage, hydrogen production, green transport, sustainable aviation fuel and agri-tech, which could all accelerate progression from enhanced credits.

It’s of vital importance that businesses get the best advice from experienced and qualified advisors. Our specialist R&D division at Evelyn Partners Ireland can guide you through the process to ensure all applicable claims are verified, evidenced correctly and rewarded.

R&D corporation tax credits continuously evolve, leading to increased incentivisation for Irish businesses. Currently a 25% cash refund for qualifying R&D expenditure the tax credit increases to 30% for periods starting on or after 1 January 2024. The credits are in addition to the standard tax deduction or capital allowances for the qualifying expenditure.

To qualify, the R&D must meet the Irish government’s technical requirements or “Science Test”. Once these are met, the following costs can be considered:

• Wages and salaries of employees performing the R&D
• Materials and consumables used in the R&D process for prototypes, trials and testing
• Software and cloud computing costs
• Equipment purchased for use in R&D projects
• R&D subcontracted to 3^rd parties, which can include agency personnel, or universities in the EEA or UK, although these subcontracted costs are subject to certain caps on the amount that can be claimed
• Construction and refurbishment costs for R&D buildings

The refund will be provided in three annual cash instalments of 50%, 30% and 20%, respectively, and a company can use the refund to settle a current year tax liability. A claim must be filed within 12 months of the accounting period ending.

Whether you’re working in engineering, science, or software development, if you’re researching new concepts, developing new products or creating new or improving production processes, Evelyn Partners can help you add value to your claim in a robust and efficient way. This is regardless of whether you’ve claimed R&D tax credits before or are new to the scheme.

We tailor our services to suit your business needs. Whether it’s an end-to-end partnership or high-level advice, our goal is to optimise your business’s R&D relief and promote a culture of innovation within your company.

^[1] - Impact 2030: Ireland’s Research and Innovation Strategy - First Annual Progress Report , 2023