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R&D Tax Credits Explained: How Your Business Can Claim and Benefit
By Marie Carolan FCCA CTA, 28th March 2025
Every business looks for funding to grow – whether that be from financial supports, investment, or grants. An often-overlooked source is R&D Tax Credits – the government incentive to encourage companies to invest in research and development. Some recent changes to the scheme now make it much more accessible for Irish companies.
If companies want to grow, they must innovate. But whether it’s developing new products or improving existing processes, R&D projects incur substantial expenditure.
Between hiring specialised talent and purchasing equipment, the costs can quickly add up. Many Irish businesses don’t realise they are already meeting the requirements for the R&D Tax Credit.
Some common R&D Tax Credit misconceptions are:
‘We are not a science lab’
ANY business that is developing innovative products or services can qualify, whether they be tech companies developing machine learning, engineering companies developing energy solutions, ICT companies creating more efficient algorithms, food companies devising innovative products or software companies adding functionality and user experience. All these are elevating their products and hence are carrying out ‘eligible R&D’.
‘We are a loss-making company’
Many companies invest heavily in R&D to scale in their early years. Regardless of whether you are profit or loss-making, if the project qualifies… project qualifies, these investments can be turned into cash.
‘It’s not worth the hassle’
R&D Tax Credits can be daunting. Some companies feel it takes up too much of their time but finding a service provider that doesn’t charge a hefty fee is usually the challenge.
‘It can be daunting’
Some companies decide it would take too much time. And there aren’t many companies that will advise without charging a hefty fee.
‘We don’t want to come to Revenue’s attention’
A common and understandable stance, however, Revenue is there to support this incentive once all criteria are met, and a valid claim is the reward usually outweighs the risk!
These are common concerns, but with a full review from an experienced advisor you can weigh up the effort versus the reward. And there has never been a better time to evaluate your company’s eligibility to claim R&D Tax Credits. The last budget announced new improvements for all companies:
- The claimable rate is increased from 25% to 30% from Jan 2024 – the most substantial change to the scheme since its inception.
- Doubling of the first-year payment from €25,000 to €50,000. This change is designed to expedite funding for companies with claims of less than €100,000.
- Pre-Trading Companies can now claim R&D tax credit for all years where a valid claim would be due had they been trading.
- Pre-notification is now required for companies intending to claim the R&D tax credit for the first time.
In Summary, R&D tax credits are a valuable tool for supporting innovation and growth. With the new changes, it is the small and SME companies that mostly benefit, including pre-revenue start-ups.
If you need advice on tax or registering for tax for your company in Ireland, please get in touch with the Company Bureau team for a free consultation. Call us at +353(0)1 6461625 or fill out our online contact form.
Disclaimer: This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.
