Description

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In this episode, Paula Byrne outlines the recent changes to the Research and Development Tax Credit in Ireland, which has increased from 25% to 30%. She details the conditions for companies to qualify for the credit, the process of claiming and obtaining refunds, and the implications of these changes for limited companies engaged in research and development.

Paula also covers how companies can leverage the tax credit for in-house R&D expenses, plant and machinery, and buildings used primarily for R&D activities and what you should look out for in an exam question with the change to the Credit.

Episode Summary:

1. Eligibility: The R&D tax credit is available to limited companies in Ireland, not sole traders. The company must be within the charge of Irish corporation tax.
2. Tax Credit Rate: The tax credit has moved from 25% to 30%.
3. Location of R&D: Research and development must be carried out in Ireland, the EU, the EEA (including Norway, Liechtenstein, and Iceland), or the UK.
4. Claim Submission: All R&D claims must be submitted within 12 months from the end of the accounting period.
5. Refund Options: Companies can offset the credit against tax liabilities over a three-year period, or opt for a repayment in the form of refundable installments over the same period.
6. Usage of Credit: The credit applies to in-house R&D expenses, including overheads, plant and machinery, buildings used for R&D, and can potentially be applied to salaries of key employees under specific conditions.
7. Key Employee Benefit: The tax credit can be partially allocated to key employees, provided they meet conditions like spending 50% of their time in R&D activities and maintaining an effective income tax rate of at least 23%.

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