IRDG February 2014 Alfie Brown Incentives & Financial Services - - PowerPoint PPT Presentation

Alfie Brown

Incentives & Financial Services Branch

Research & Development Tax Credit

IRDG

February 2014

Topics

• Recap on purpose and history
• Claiming the relief (the “dos” and

“don'ts”)

• Changes in 2013 Finance (No.2) Bill

The Relief

• S.766 Tax Consolidation Act 1997
• Activities, plant/machinery, buildings
• 25% of incremental expenditure
• Group expenditure basis
• Claimed on CT1

Developments over Time

• Take-up

75 (2004) – 1474(2012)

• Cost

71m(2004) – 300m (2012)

• Buildings
• Payable Credits
• Key Employee
• Volume basis
• Accounting Treatment

• Scientific or Technological

Advancement

• Resolution of Uncertainty
• Systematic Approach

Qualifying is not Rocket Science

Qualifying Activity

• Trading or 51% sub of

trading co.

• Carries out R&D
• Maintains a record

Qualifying is not Rocket Science

Qualifying Company

Qualifying Expenditure

S.766 (1)(a) …means expenditure… incurred by the company wholly and exclusively

in the carrying on by it

• f research and development activities

Simple Rules

• In the carrying on – Means just

that

• By it – Limits on
• utsourcing/subcontracting
• Of R&D activity – Not before or

after

Some Points to Note

• EI/IDA Grants v. R+D tax credit
• Base year – practical issues
• Group structures

What can go Wrong?

• Science Test
• Accounting Test
• Poor Records
• Non Qualifying Activity
• If in doubt – Ask!

Finance Bill(No.2) 2013

• Key Employee Provision

Clawback on Company (not employee)

Doubled in deliberate cases

• Volume spend up to €300k

Eventual phase out of base year

• Outsourcing/Agency up to 15%

Revenue Activity

• New guidance in early 2014
• Planned Events with EI/IDA/IRDG
• Continued Programme of Audits

14

Go raibh maith agaibh

rdadmin@revenue.ie abrown00@revenue.ie