Research & Development (R&D) Relief for employees

by | Feb 17, 2020 | Advice

Background

Companies can claim a tax credit from Revenue if undertaking R&D activities. A company has the decision to surrender all or part of this tax credit and therefore an employee of the company may be entitled to claim this credit if working in R&D activities.

Am I eligible?

To apply for this credit, you as an employee;

  • Must never have been or are a director of the company or associate company
  • Are not connected to a director of the company or associate company
  • Do not have any material interest in the company or associate company
  • Not connected to anyone who has a material interest in the company or associate company (i.e owns more than 5% share)
  • You must have performed 50% of your duties in conception or creation of new knowledge, products, processes, methods or systems
  • Your employer must be entitled to claim at least 50% of the cost of your wages as R&D expenditure

R&D Relief Limit

Income tax payable in the year of claiming must be at least 23%. See our example below;

source Revenue.ie

Unused Credit

If the full credit amount is not used in 1 year, it can be carried forward to reduce further years.

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