The R&D tax credit has been around since 2004 but judging by poor take-up rates Irish firms remain remarkably unaware of its existence and potential, according to a report in The Sunday Business Post.

Ken Hardy details how the tax credit works and how start-ups and SMEs in particular could be missing out by not availing of it.

“The scheme works by giving companies that are resident in Ireland 25% of the amount they spend on incremental R&D over a given accounting period,” he says. “For example, a company spending €1,000 on R&D could potentially claim up to €250. This is not an insignificant amount of money for cash-strapped firms that are reliant on innovation.”

There is no limit on how little or how much can be claimed based on innovation spend and is self-assessed. This has its own pitfalls as extensive documentation may be required and Hardy advises business owners to seek professional advice prior to making a claim.

More than 80% of companies surveyed by KPMG were not claiming the credits.

“This disparity could be due to a lack of information and understanding of the scheme,” Hardy says, calling for reform to make it simpler for SMEs in particular.

However, although far from perfect, SMEs should still learn about it and avail of it.

“The present regime may not be perfect but innovative SMEs should nevertheless endeavour to learn about the R&D tax credits (and cash refunds) they are entitled to.”

Noone Casey are working with a number of clients to  ensure they are claiming their R&D tax credits. If you want assistance or further information on this do not hesitate to contact Anthony Casey.

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