On Friday 10th January 2025, the Revenue Commissioners (Revenue) published ebrief No. 009/25, updating the R&D Tax Credit Guidelines (i.e. Part 29-02-03 of the Tax & Duty Manual).
The update relates to the first instalment amount due under S766C and S766D TCA 1997. When these sections were introduced in Finance Act (FA) 2022, the first instalment amount was defined as the greater of:
- €25,000, or if lower, the amount of the credit claimed, or
- 50% of the amount of the credit claimed.
This €25,000 figure was increased to €50,000 in F(No.2)A 2023 and further increased to €75,000 in FA 2024.
On Friday, Revenue published updated guidelines, clarifying the R&D Tax Credit claim periods that these first instalment amounts apply to. They are:
- €25,000: R&D Tax Credit claims for accounting periods commencing on or after 1st January 2023 and before 1st January 2024.
- €50,000: R&D Tax Credit claims for accounting periods commencing on or after 1st January 2024 and before 1st January 2025.
- €75,000: R&D Tax Credit claims for accounting periods commencing on or after 1st January 2025.
In all cases, the €25k/€50k/€75k figure (or if lower, the amount of the credit claimed) is compared to 50% of the credit claimed and the first instalment is the greater of these two amounts.
R&D Tax Credit Pre-Notification Requirement
If you are a first time claimant company or have not claimed the R&D Tax Credit for any of the last three years, you need to be aware of the new pre-notification requirement introduced by F(No.2) A 2023. These apply to claims made for accounting periods commencing on or after 1st January 2024.
Under these new rules, companies must notify Revenue at least 90 days before making a claim of their intention to do so. The pre-notification must be submitted in the form prescribed by Revenue (more details here) and provide the specified information, including:
- the name, address and corporation tax number of the company,
- a description of the research and development activities carried out by the company,
- the number of employees carrying on research and development activities,
- the number of R&D project, and
- details of expenditure incurred by the company on research and development activities which has been or is to be met directly or indirectly by grant assistance or any other assistance
Increase in R&D Tax Credit Rate to 30%
On a more positive note, the 30% R&D Tax Credit is also now operational, applying to claims for accounting periods commencing on or after 1st January 2024.
If you have any questions regarding the above points or other R&D Tax Credit issues, please get in touch on 0877582744 or at eoinbrennan@scimetrnd.com