Up to 94 per cent of the companies that could qualify for refunds through Ireland’s research and development (R&D) tax credit may not be taking advantage of the scheme, according to a British advisory firm newly established in Ireland.
London-headquartered TCM Funding has launched in Ireland and is preparing to open an office in Dublin, offering guidance to companies seeking to unlock Government funding streams.
Group managing partner and co-founder Bradley Chalmers told The Irish Times that of the approximately 350,000 companies in the Republic, he believes that between 5 per cent and 10 per cent – between 17,500 and 35,000 firms – would be eligible to qualify for the R&D tax credit.
However, fewer than 2,000 companies claimed the relief in 2023, implying that between 89 per cent and 94 per cent of the entities that could benefit from the R&D tax credit are not doing so.
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“Of course, it is an estimate, and until we start digging deeper, I won’t know [for certain], but I can see quite clearly there is a big discrepancy between awareness and uptake,” Chalmers said.
The R&D tax credit allows businesses undertaking research to claim back 35 per cent of the total costs of their activities in cash or against their corporation tax bill in annual instalments.
The rate of relief was increased from 30 per cent to 35 per cent in last October’s budget. The Government also increased the threshold for first-year refunds under the scheme from €75,000 to €87,500 to support smaller projects.
Yet, even though 45 per cent of Irish companies are in sectors that could qualify for the credit, according to TCM, uptake is dominated by large companies headquartered in Ireland, many of them multinationals.
“So €1.4 billion was claimed in tax credits in the year 2023,” Chalmers said.
“They’re the most recent figures we have from the Central Statistics Office. Out of that, €1.1 billion was claimed by large companies. A lot of those companies take advice from overseas. It shows us that there’s a big opportunity there for SMEs.”
Chalmers said TCM Funding is currently based at its accountant’s office in Park West, “while we’re going through our official launch”.
“Then we will go ahead and get an office in Stephen’s Green,” he said. “We’re already looking at offices, and we started the recruitment process, so it’s very much in motion now.”
The firm is part of TCM Capital, which Chalmers cofounded in 2020, and now has 45 staff and is forecasting revenues of £4.5 million (€5.21 million) this year, he said.
