Call for Ireland to deploy dedicated R&D regime

11 May 2011

It is imperative that a dedicated SME regime along the lines of the UK system be introduced without delay to deliver on the potential of the sector, KPMG said in response to last night’s Jobs Initiative by Finance Minister Michael Noonan TD.

Ken Hardy, partner with KPMG’s R&D Credit team, said Noonan’s statement gives no insight into the proposed enhancements or when the changes proposed in the Programme for Government would be introduced.

“What is needed is a separate, simplified, more accessible and attractive credit scheme for SMEs. The current ‘one size fits all’ approach to R&D tax credits is inappropriate as evidenced by its poor uptake.”

Recent research undertaken for KPMG by Red C found that 82pc of Irish corporate SMEs do not realise they could be engaged in genuine research and development activities for which they could be claiming valuable tax credits.

The research also identified that if the R&D tax credit was increased from 25pc to 35pc more than one in three companies (36pc) say they would increase employment.

“This is exactly the sort of sustainable employment Ireland needs.”

Too little ‘R’ and too much ‘D’ in Ireland

Hardy added there is a major issue around perception of R&D.

“In Ireland, we have little ‘R’ but a large amount of ‘D’. We don’t do a lot of pure research, we do conduct significant amounts of development, particularly in food and drink, but also in areas like manufacturing, heavy and light engineering, software and agriculture.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years