It was announced on the 1st of April that Revenue will accelerate payment of the research & development tax credit that are due to be paid to companies in 2020. This could free up thousands of euro in cash for businesses struggling during the Covid-19 crisis.
Under the excess R&D tax credit regime, companies based in the Republic can claim 25 per cent back for every euro they spend on research and development. Many companies who don’t have a tax liability in a given year can get a cash refund from Revenue which is paid back over a three-year period in three instalments.
But under the regime, Revenue is only required by law to pay the cash refund after September 23rd each year, the date by which a company’s corporation tax return must be filed. That means that in normal circumstances if companies were to file that return this week, Revenue wouldn’t need to pay the cash refund until after September.
The Revenue e-Brief 056/20 has relaxed the normal rules relating to R&D instalments which are payable in 2020 and is allowing companies to avail of their R&D cash instalments earlier than by reference to the filing date of the company’s corporation tax return.
In order to accelerate the repayment of any 2020 R&D tax credit instalments, the company must:
- Go to Revenue MyEnquiries.
- Make a request to expedite the excess R&D instalments (tag the request appropriately as “R&D instalments payable in 2020”).
- Have filed the Form CT1 (corporation tax return) for the accounting period ending in 2019 at the time of the request.
Please contact Una Beecher on (021) 4310266 to discuss this.