Early repayment of R&D tax credits

Companies due to receive repayable R&D tax credit instalments in 2020 can apply to Revenue to expedite the repayment.

In the exceptional circumstances of the Covid-19 pandemic, there has been a welcome concession implemented by Revenue in relation to repayable R&D Tax Credits due to be repaid to a company in 2020.

R&D tax credit instalments

Previously, the earliest that the R&D tax credit could be repaid was after the due date for submitting the corporation tax return (CT1) for the accounting period in question. For example, credits repayable for year ended 31 December 2019 would not be repaid before September 2020 and in most cases would not be repaid until the later part of the year or even early the following year.

Revenue concession for instalments due in 2020

Revenue have now confirmed that if the CT1 is submitted, then they will expedite the repayment (subject to some checks) so that companies will not have to wait the usual minimum nine months after the accounting period end.
 
Therefore, any R&D tax credit repayments due for FY2017 and FY2018, together with the FY2019 first instalment, should be repayable once the FY2019 CT1 has been submitted. A request must be made to Revenue by the tax agent to expedite the repayment due to the company, and the CT1 must have already been submitted before this request.
 
Tagged iXBRL accounts (electronic financial statements) are typically required at the time of filing the CT1. Revenue are expected to relax the requirement for tagged iXBRL accounts to be filed early, thus enabling the R&D tax credit repayment to be processed and the tagged iXBRL accounts to follow later. 

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars corporate tax team below:

Staff Member

Position

Email

Telephone

Gerry Vahey

Tax Partner

gvahey@mazars.ie

01 449 4456

John Burke

Assistant Tax Manager

jburke@mazars.ie

01 512 5571

June 2020

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