Are R&D Tax Portals Really Better Than An R&D Tax Advisor?

With more and more people becoming aware of research and development (R&D) tax credits, the options for making your claim are increasingly diverse. There has been a steady increase in the number of companies claiming R&D tax credits in Ireland, which was at its highest ever in 2019, with 1,601 companies claiming €626 million for their research projects. The success of the scheme endures since its launch in 2004 but has also led to many new R&D tax advisors setting up and offering guaranteed results without the credentials to back them up.

Recently, R&D tax portals like Tax Cloud have made waves in the industry, providing a high-quality service for a fraction of the price of traditional advisors. But are they really better? And how can you spot a superior service?

What are R&D tax credits?

R&D tax credits are a Revenue-backed tax incentive which encourages companies to invest in innovation, especially within Ireland and the EEA. This investment stimulates the economy and boosts Ireland’s position as a global leader in research and development.

If your company is making an advance in science and technology, by improving, innovating or developing a process or product, then you likely qualify for R&D tax credits. The best way to tell is to ask if your technical lead faced technical uncertainties from the outset of your project. Your project must go beyond applying existing technologies to a new solution.

R&D tax credits in Ireland are worth up to 30% of your eligible R&D costs when you apply for them through the ROS system, which can be used to offset Corporation Tax or, in some cases, as a credit payable in three equal instalments over three years. The team behind Tax Cloud, Myriad Associates, have developed a calculator to help you estimate how much you could be entitled to. However, Revenue will expect justification for your application and failure to provide ample information could leave you vulnerable to an enquiry, which is time-consuming, stressful and expensive.

R&D tax credit portals – are they all they’re cracked up to be?

Smaller companies and start-ups first dipping their toes into R&D tax credits may find themselves overwhelmed with the number of R&D tax advisors and sourcing quotes from each company can be an unnecessary hassle. You may consider making your own claim or using your generalist accountants to prepare your claim, however neither of these options have the focused expertise in R&D claims you’ll find at Tax Cloud and can leave you open to mistakes or a claim which is not fully maximised.

Work to your own schedule

Using a R&D tax portal cuts out the time-wasting steps and gets straight to your claim, saving you valuable moments which matter all the more to small companies. Once you’re approved on Tax Cloud, you’re free to progress at your own pace, guided by the portal. You can consult with tax experts and technical specialists whenever you need support while working to your own schedule, which is often essential for the busy timetables in small companies.

High-quality claim at a low cost

Tax Cloud’s fixed fee structure means that there are no hidden fees or back and forth agreeing on terms. You can expect to pay 10% of the corporation tax saving on any claim worth less than €200,000 and 5% on any claim above that threshold, subject to a minimum fee of €1,250. Other tax consultancy firms can charge anything upwards of 20% of your entitlement; Tax Cloud’s fee is very competitive in the market, leaving you with more money to spend on what matters, like new projects and further innovation.

Similar workload

In the traditional approach, you will be asked to provide all the resources for your claim, which can take up as much time gathering together as the claim takes to be written. Wages, materials, overheads, subcontractors… it can quickly add up, especially for the first few claims small companies make, as you’re not in the habit of keeping records with your R&D claim in mind. With Tax Cloud, we put the power in your hands, guiding you where to put all the information you have gathered instead of leaving it to someone else to sift through.

Know where you stand

With Tax Cloud, you can rest easy knowing exactly where your claim is. Gone are the days of chasing the tax specialist, the cost associate and the technical consultant to find out how much longer you need to wait for your money. With a R&D tax portal, you know exactly what’s left to do and where to get the help to ensure your claim is watertight and maximised.

Tax Cloud’s Partner Program

With our partner program, it’s even easier to boost innovation investment, as accountants can enhance their offering with Tax Cloud. Generalist accountants can receive free training for the portal so they can complete claims on behalf of their clients, supported by the expert Tax Cloud team. Not only can accountants now provide a new service for their clients, but they can receive up to 30% of the Tax Cloud fee for the introduction.

Get in touch with the experts

If you believe you have an eligible project, or if you’d like to know more about our partner program, get in touch with the experts at Tax Cloud for friendly, specialist advice. Call us on +353 1 566 2001 or use our contact page.

Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud