Corporate Tax relief may be available for your small or medium-sized enterprise (SME) for costs incurred on research and development (R&D). R&D relief allows SMEs that carry out qualifying R&D related to their trade to claim an extra Corporate Tax deduction for certain qualifying expenditure. You can make a claim for R&D relief up to 2 years after the end of the accounting period it relates to.

This tax relief allows SMEs to:

  • Deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction;
  • Claim a tax credit if the company is loss making, worth up to 14.5% of the surrendable loss

Companies that can claim relief:

  • If you are a SME with less than 500 staff;
  • A turnover of under €100 million or a balance sheet total under €86m

Various costs can be claimed on the project from the date the project commences, up until you develop and discover the advance, or the project is stopped. These include:

  • Employee costs- for staff working directly on the R&D project, a proportion of their salary, wages, class 1 national insurance contributions, and pension fund contributions;
  • 65% of the relevant costs of using a subcontractor for your R&D activities;
  • Software licence fees bought for R&D;
  • Relevant proportion of consumable items used in R&D, including materials and utilities;
  • Payments made to volunteers involved in clinical tests

In order to claim R&D relief, it is necessary to show how your project meets the definition of R&D. 

For assistance and guidance on how to claim and support a R&D relief claim, please contact our team.

*Note that your company cannot claim SME R&D relief if the project is already getting notifiable state aid or you’ve been subcontracted by another company.