MID WEST companies may not be taking full advantage of the new regulations around tax incentives for research and development projects, a financial expert has warned.
Addressing a recent Shannon Chamber seminar on research and development (R&D) Ian Collins, Partner and Head of Innovation Incentives at EY Ireland, said that any company doing something that is innovative should not overlook applying for R&D support.
“If firms are exploring how to improve yields, products, and services, they should definitely check out what’s available,” Mr Collins said.
“Recent changes to Irish tax legislation, allowing for cash refunds as well tax credits have also made R&D incentives even more attractive. If you’re failing to apply for these cash reliefs, you are losing out, money-wise, in a very real sense,” he added.
Together with Leanne Storan, Tax Partner at EY Ireland, Mr Collins outlined the range of incentives and opportunities for R&D activities available from the Irish Government and through the EU Horizon Programme.
Officials from the Business Taxes Policy and Legislation Division of Revenue outlined changes to the R&D legislation introduced in the Finance Act 2022 at the seminar.
Principal Officer Aisling Dooley and Assistant Principal Officer Clare Wardell explained that companies now have the option of claiming support via cash refunds on a three-year instalment basis or as a tax credit against corporate tax (CT) liabilities.
Another significant change is that pre-trading R&D expenditure is now refundable in three annual instalments from the first accounting period that a company begins to trade. Previously, the amount could only be carried forward and used against CT liability in future periods.
The Revenue speakers also outlined transitional arrangements that are in place as the new regime commences.
Fiona Gilchrist, Strategy Lead with Jaguar Land Rover’s R&D Software Engineering Centre in Shannon, outlined the company’s extensive research and development activities, centred on connected, autonomous, and electric vehicle engineering projects.
Commenting on the event, held at the Future Mobility Campus, Shannon Chamber CEO Helen Downes said that R&D is a critical part of successful business growth, which the Chamber is eager to promote at every opportunity.
“The Shannon Free Zone and the region generally has a proud record in this field over the years. We believe the information and guidance offered at the seminar can help, in a very practical way, to ensure that local firms can maximise the lucrative benefits on offer in the future,” she added.
