Firms engaging in R&D in Ireland have until 31 December to secure their tax credits for their investments going back to 2004.
Revenue this week published an e-brief stating that companies could lodge a protective claim on R&D expenditure on or before 31 December 2008 to secure their tax credit for 2004, 2005, 2006 and 2007.
Under the current legislation, a company had the possibility of making a claim for the previous four accounting periods. However, according to the new finance bill released last Thursday, such claims will now have to be made within 12 months from the end of the accounting year in which the R&D expenditure giving rise to the tax credit was incurred.
“The protective claim is welcome news for companies that have not yet put their claim through,” explained Tanguy Morel, business development manager with Leyton Associates, a firm with 10 years’ experience in redeeming R&D tax credits worldwide.
“At least now companies will not be under as much pressure to get through the entire claiming process within the next four weeks”.
While this is brilliant news for companies to secure their previous four years of tax credits, there are still time constraints on the filing deadline, with the e-brief stating that “specific details in relation to the claim should be submitted shortly thereafter” the 31 December 2008.
“Following the recent changes in the finance bill, this is the best time for companies to look into filing a claim,” explained Leyton Associates managing director, Marjory Wachtel.
“From our experience, many companies in Ireland are not submitting claims due to the belief that R&D relates to white coats and lab activities. But the reality is R&D is much more than that”.
She said the new finance bill will certainly motivate and encourage more companies to explore R&D and take advantage of the tax-credit incentive, resulting in Ireland maintaining its competitive advantage through creativity and innovation.
By John Kennedy
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