R&D Tax Credits Explained
Your Company could be eligible for thousands of pounds in tax relief. Find out everything you need to know about R&D Tax Credits below:
What are R&D Tax Credits?
Research & Development (R&D) Tax Credits allow your company to recover a percentage of the money you’ve already invested in developing new products, processes, or solutions. You can claim this relief from Revenue, and it’s available to businesses across a wide range of industry sectors all throughout Ireland.
The Irish government introduced tax credit relief for R&D back in 2004 to reward innovation and boost national economic growth. Since then, companies across a wide range of industries and sectors have received over €25bn in financial support through claiming R&D Tax Credits.
Why claiming R&D Tax Credits is important
R&D Tax Credits play a crucial role in helping Irish businesses innovate and grow by reducing the cost of developing new products or solving technical challenges. In 2023, nearly 2,000 companies claimed back around €1.4bn in R&D tax relief.
R&D Tax Credits can help your business by:
- Providing a huge financial boost, helping you reinvest in people, equipment, and future research and development projects.
- Unlocking accessible funding without the need for loans, grants, or external investment.
- Accelerating growth, making it easier to get ahead of competitors and bring new services or technologies to market.
What types of Research & Development Tax Credits can you receive?
A successful R&D tax credit claim rewards your business for its innovation and research. Depending on your company’s circumstances, this can take the form of one of the following:
- Reduction in Corporation Tax: Your 30% R&D tax credit (rising to 35% for accounting periods beginning 1st January 2026) offsets your Corporation Tax liability, in addition to the standard 12.5% deduction.
- Refundable credit: If your credit exceeds your Corporation Tax liability, unused amounts can be refunded over three years (subject to prior Corporation Tax paid).
- Carry-forward of unused credit: Any remaining credit after offsets and refunds can be carried forward indefinitely to future accounting periods.
No matter the size of your business, R&D Tax Credits provide a way to turn your investment in innovation into tangible financial rewards.
Find the value of your claim
Your Company could be eligible for thousands of pounds in tax relief. Find out everything you need to know about R&D Tax Credits below:
Is your business eligible for R&D Tax Credits?
Your company may be eligible for R&D Tax Credits if it undertakes projects aimed at developing new or improved products, processes, or services. Even if your project is unsuccessful, this doesn’t affect eligibility to apply for R&D tax relief – what matters is the work you do to overcome technical or scientific uncertainties.
What counts as Research and Development for tax purposes includes:
- R&D for tax purposes takes place when a project seeks to achieve an advance in science or technology.
- The activities which directly contribute to achieving this advance in science or technology through the resolution of scientific or technological uncertainty are R&D.
- Certain qualifying indirect activities related to the project are also R&D. Activities other than qualifying indirect activities, which do not directly contribute to resolving the project’s scientific or technological uncertainty, are not R&D.
Revenue’s definition isn’t always clear-cut. If you’re not sure if your work qualifies as R&D, the contact us today to find out.
What are the qualifying costs for R&D Tax Credits?
To submit a successful R&D Tax Credit claim, it’s important to track all eligible project expenses. Below, we break down the eligible R&D expenditure:
- Cost of staff directly involved in R&D work – wages/salaries, employer PRSI, pension contributions
- Consumable items – fuel, materials, power, water used in R&D
- Subcontracted R&D (subject to limits – generally the greater of €100,000 or 15% of in-house R&D spend)
- Certain agency/externally provided staff costs
- Plant and machinery used 100% for R&D (qualifies through normal capital allowances; a tax credit can be claimed on the depreciation/capital allowances portion)
- Buildings used for R&D (limited relief available via R&D building allowance provisions)
- Consumables that are sold, or incorporated into products for sale
- Staff costs unrelated to R&D – e.g. redundancy payments, admin, payroll, or routine maintenance work
- Subcontracted activities not directly contributing to R&D (e.g. routine testing, analysis, or consultancy outside R&D scope)
- Capital expenditure on land
- Costs of patents, trademarks, or intellectual property protection
- General overheads (rent, rates, insurance, marketing, distribution, etc.) not directly attributable to R&D
If you want to find out more about how your company will be affected by these changes, please get in touch with our expert team:
How often can you claim R&D Tax Credits?
You can make an R&D Tax Credit claim each year, as well as for the previous 12 months. For example, if the end date of your accounting period is 31st December 2023, you would need to submit your R&D claim for that period by 31st December 2024.
How long does it take to receive R&D Tax Credits?
Revenue generally processes R&D Tax Credit claims in line with your Corporation Tax return (Form CT1).
If your company is in a taxpaying position, the credit reduces your Corporation Tax liability in that accounting period.
If your company is in a loss-making position, the refundable portion of the credit is paid out by Revenue in three instalments spread over three years, subject to limits based on Corporation Tax previously paid.
Your first refund typically becomes available within 12 months of the year-end in which the expenditure was incurred.
How much can my company claim in R&D Tax Credits?
The amount of relief you are eligible to claim will depend on:
- The level of your qualifying R&D spend
- Whether you are profitable or loss-making
- How much Corporation Tax you have already paid in the last 10 years (which affects refund limits)
The credit is worth 30% of qualifying R&D expenditure (rising to 35% for accounting periods beginning 1st January 2026), on top of the standard 12.5% corporation tax deduction.
Find out the value of your claim
Any business in any sector can qualify. Discover how much you could be owed today!
Avoid costly mistakes by working with randd
Submitting an R&D claim without specialist knowledge can be risky, as mistakes like including non-qualifying costs or missing eligible expenditure may trigger Revenue enquiries and potentially reduce the value of your R&D Tax Credits.
R&D tax legislation is complex and constantly evolving, so working with experts can make a real difference. When you choose randd as your R&D tax credit specialist, you can benefit from:
- Minimised risk of enquiries or claim rejection – randd’s overall enquiry rate is significantly lower than the industry averages.
- Fully transparent, bespoke consultations – we only submit claims we are confident in.
- A dedicated team of R&D Tax Credit specialists – we thoroughly research your project to build a strong claim and maximise your tax relief.
- Substantially more R&D tax relief than you would typically receive through an external accountant, agent, or self-submission.
The randd research and development tax claim process
With over 15 years in the industry, we have the specialist knowledge to support countless innovative businesses as they push the boundaries of technological development. We have successfully claimed back millions of pounds through our seamless, simplified tax claims process:
1. Eligibility check
1. Eligibility check
Using our tax credits calculator, you can check if your business qualifies for R&D tax credits, as well as receive an estimate of how much you could claim. You’ll then have a prequalifying call with an expert member of our team – once we establish you have qualified, we can issue a contract.
2. Compiling and submitting your Revenue claim
2. Compiling and submitting your Revenue claim
Once you have signed the contract, we will book an initial consultation within 1–2 weeks with one of our sector specialists. Throughout the process, our team of technical experts, financial analysts and tax consultants will gather the required details and work behind the scenes to craft a robust claim that maximises your R&D claim result.
3. Risk assessment
3. Risk assessment
We perform 3 different stages of risk assessment – at sign-up, at the first technical meeting and again before submission. We minimise any obstacles to ensure a smooth process and a successful claim, keeping you fully in the loop from start to finish.
What is Research & Development?
R&D, is an activity undertaken by companies when attempting to develop new products, processes, or services, or improve and optimise existing ones.
What about Tax Relief for creative industries?
Creative industry tax relief covers a group of eight Corporation Tax reliefs that permit eligible companies to increase the amount of expenditure they can claim.
Eligible R&D activities
Optimise your R&D tax relief with an expert team that handles R&D claims for a living.
R&D Tax Credits FAQs
How do I prove my project qualifies for R&D Tax Credits?
To claim R&D Tax Credits, Revenue requires evidence that your project involved qualifying research and development. You should keep records of the activities undertaken, the scientific or technological uncertainties addressed through your work, and associated costs, such as:
- Staff wages
- Consumables
- Subcontractor invoices
Submitting clear documentation helps maximise your R&D claim and reduce the risk of you receiving HMRC enquiries.
Can I claim R&D Tax Credits if my project fails?
Even if your project doesn’t achieve the desired results, you may still be eligible for R&D Tax Credits, as claims are based on the attempt to innovate rather than the outcome. You can learn more in our guide: do failed R&D projects qualify for tax relief?
Are R&D Tax Credits only for technology companies?
No. While software & IT companies are popular in the field, any company conducting qualifying Research & Development activities – from manufacturing to sports science – may be eligible.
Can I claim R&D Tax Credits alongside other government incentives?
Research & Development Tax Credits can often be claimed alongside other government incentives, such as capital allowances or innovation grants. However, the rules vary depending on your sector and the type of expenditure included in your claim.
Can I backdate R&D Tax Credit claims?
Yes. R&D Tax Credit claims must be filed within 12 months of the end of the relevant accounting period, and can be backdated where this deadline has not yet passed.
Ready to discuss your unclaimed R&D Tax Credits?
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