Launch of Irish Revenue’s R&D Guidelines

The eagerly anticipated updated Research & Development Tax Credit Guidelines have been recently published by Irish Revenue.

Summary of Changes:

The main changes from Revenue’s prior guidance are in the following areas:

  • Qualifying employment costs, including a reasonableness test for proprietary directors
  • The treatment of certain overhead costs
  • Qualifying and non-qualifying activity within software development, including guidance for agile development methodologies
  • The use of individual consultants on a part time basis
  • Materials used for R&D activities and subsequently sold
  • R&D carried on as part of an existing trade
  • Capital expenditure on  buildings
  • Transfer of R&D credits intra-group
  • Change in ownership implications on a group’s base year
  • Records to be maintained

In addition to the above, the advanced opinion mechanism contained in Revenue’s previous R&D guidelines have now been removed.

Impact on Claims:

Whilst these Guidelines represent Revenue’s interpretation of the R&D tax legislation, it is worth noting there has been no legislation amendment. Nonetheless these changes may impact on how companies carrying on qualifying R&D activities to appraise themselves of these changes and consider how these Guidelines may impact on their R&D claims.

How can FM Accountants help?

The key to unlocking your R&D tax benefits is an in-depth understanding of:

  • the scientific and technological issues involved in your business
  • the business processes in your organisation
  • the tax rules and guidance on the meaning of R&D for tax purposes and how this applies to your industry sector
  • the ability to identify and capture all eligible R&D activities throughout your organisation

An eligible claim requires a well structured approach, which identifies eligible activities, quantifies eligible expenditure, and is substantiated through robust supporting documentation.

FM Accountants have dedicated and highly specialised teams located across the globe focusing solely on R&D tax claims. These multi-disciplinary teams are made up of engineers, PhD’s, industry specialists and tax professionals. We have helped many clients evaluate, document and successfully complete R&D claims generating significant benefits.

We have liaised regularly with tax authorities on successfully agreeing R&D claims and have developed a strong working relationship with tax authorities in this regard.

We would be delighted to meet with you to explore how these new Guidelines may impact your business.