R&D Tax Relief: A Missed Opportunity for Innovative Small Businesses?
Many small businesses in Ireland pride themselves on being innovative — developing new products, improving processes, or creating smarter ways to serve their customers. Yet despite this, at Kerry Lehane & Co we believe a significant number are overlooking a powerful incentive designed to reward exactly that: Research & Development (R&D) Tax Relief.
This government-backed scheme allows businesses to claim back a portion of their R&D-related expenditure, potentially leading to substantial tax savings or even a cash refund. Unfortunately, many eligible businesses assume they don’t qualify — often because they misunderstand what counts as R&D.
What Qualifies as R&D?
R&D isn’t limited to white coats and laboratories. If your business is solving technical problems, experimenting with new materials, streamlining software, or developing prototypes — you may be undertaking R&D without realising it.
Eligible activities include:
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Developing or improving products, services, or processes
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Using technology to solve specific technical challenges
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Creating or enhancing bespoke software
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Conducting feasibility studies or testing different methods
The Financial Benefits
If eligible, SMEs can claim up to 25% of qualifying R&D costs as a tax credit in Ireland — and similar rates apply in the UK. This can be used to reduce your corporation tax bill or, in some cases, result in a direct refund from Revenue.
Qualifying costs can include:
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Staff wages for R&D personnel
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Materials and consumables used during development
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Subcontractor and consultancy fees
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Overheads linked to the R&D activity
Why So Many Miss Out
Many small business owners assume the relief is only for tech firms or large corporations, but this isn’t true. Others simply don’t track R&D activities in a way that supports a strong claim — or they’re unaware the relief exists at all.
Don’t Leave Money on the Table
If your business is innovating, even in small ways, you may be entitled to relief — and it’s worth reviewing your recent projects with your accountant. Even backdated claims are possible, allowing businesses to reclaim costs from previous accounting periods.
Innovation is expensive, but tax relief makes it more affordable. Speak to your accountant to explore your eligibility — and ensure your business isn’t missing out on valuable support.
If you would like to discuss your business needs. Call Kerry Lehane & Co Accountants on 023 8856054 or email info@kerrylehane.com
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