Budget 2025 Highlights

, , , , ,

Budget 2025 Highlights

Minister for Finance, Jack Chambers delivered the final Budget today, 1 October 2023. Below we outline the highlights of Budget 2025.

Personal Tax

  • Income Tax Standard Rate Bands increase by €2,000 to €44,000 (single person), with the married single earner band increasing to €53,000, and the married dual income band increasing to €88,000.
  • Personal, PAYE, Earned Tax Credits to increase by €125 to €2,000.
  • Home Carer and Single Person Child Carer Tax Credits will increase by €150 to €1,950 and €1,900 respectively.
  • Incapacitated Child and Blind Person’s Tax Credits will increase by €300 to €3,800 and €1,950 respectively.
  • Small change to the second rate-band of Universal Social Charge which will increase from €25,760 to €27,382. The 4% rate is reducing to 3% from 1 January 2025.
  • Alignment to the tax treatment of Automatic Enrolment Retirement Savings Schemes so that they are similar to that of PRSAs. Employer contributions are tax relieved. Funds grow tax free and a tax-free lump sum can be taken on draw down of the fund up to a maximum of €200,000.

 Enterprise/SMEs

  • Ireland is the only country in the EU which taxes dividends from foreign subsidiaries. It is proposed to introduce a participation exemption for Foreign Dividends to simplify the double taxation relief provisions. Companies will have an option to claim the exemption or continue to use the existing tax and credit relief by way of an election on the company’s annual Corporation Tax return. The exemption will apply for distributions received on or after the 1 January 2025.
  • Capital Gains Tax Relief for Angel Investment to encourage investment in innovative start-ups is to commence shortly. Qualifying investments will be certified by Enterprise Ireland with a minimum investment in new shares of at least €10,000. Relief will apply if shares are held for at least 3 years. A reduced rate of Capital Gains Tax of 16% will apply on a gain of up to twice the initial investment. A lifetime limit of €10m will apply to the relief.
  • A 12-year clawback period for Retirement Relief on disposals to children on businesses valued at over €10m.
  • The various reliefs for Investment in Corporate Trades are being extended for a further two years to 31 December 2025. The €500,000 investor limit on EII investment is being increased to €1m, while it is being increased to €980,000 for SURE investments.
  • The first-year payment threshold for the Research & Development Tax Credit is being increased to €75,000. The first-year payment threshold, which allows for a claim to be repaid in full rather than spread over 3 years.
  • The Section 486C Start Up Relief is currently calculated by reference to the amount of employer PRSI paid – up to €5,000 per employee. It is proposed that amounts paid under Class S will also be considered, subject to a maximum of €1,000 per individual.
  • New relief for up to €1m of expenses incurred on companies on their first listing on a recognised stock exchange in Ireland or the EU/EEA area. The relief is to support companies in the scale up phase of their growth and development.
  • The cumulative tax-free limit for small benefit exemption is being increased to €1,500 and the number of times an employer can provide a benefit is being increased from two to five per annum.
  • An exemption from taxable benefit in kind on the provision of EV home chargers.
  • The CO2 thresholds for claiming capital allowances on business cars is being revised downwards from 2027. An expenditure of €24,000 will be allowable for cars with CO2 emissions of 0-120g/km, a reduced €12,000 for vehicles with emissions of 121-140g/km and no zero for vehicles with CO2 emissions greater than 141g/km.

Agri-Food Sector

  • CAT Agricultural Relief will now require that the donor must meet a 6-year Active Farmer test.
  • The measures for Stock Relief which were due to expire at the end of 2024 are being extended to the end of 2027.
  • 50% Accelerated capital allowances for farm safety equipment.
  • Farmer’s Flat Rate VAT compensation being increased to 5.1%.

 Housing/Cost of Living Measures

  • The Rent Tax Credit is being increased by €250.
  • The deduction for pre-letting expenditure from rental income will be extended for a further three years, to the end of 2027. The deduction is capped at €10,000 per property.
  • The Help to Buy (HTB) scheme is being extended to the end of 2029.
  • The Stamp Duty rate applied where 10 or more residential properties are acquired in any 12-month period is being increased from 2 October 2024 from 10% to 15%. In addition, a 6% rate will apply to residential properties valued excess of €1.5m.
  • A temporary one-year Mortgage Interest Tax Relief introduced last year is being extended for a further year. Relief will be available for the increased mortgage interest paid in 2024 over 2022. The relief is capped at €1,250 per property and applies to mortgages outstanding of between €80,000 and €500,000 on the 31 December 2022 and fully LPT compliant. Relief is at the standard rate.
  • The rate of the Vacant Homes Tax is again increased with effect from 1 November 2024 to 7 times the property’s existing LPT liability.
  • The 9% VAT rate for Gas and Electricity supplies is extended to 30 April 2025.

 VAT

  • The registration thresholds are being slightly increased to €42,500 for the supply of services and €85,000 for the supply of goods from 1 January 2025.
  • The supply and installation of heat pumps is reduced from 23% to 9%.
  • The Farming VAT Flat Rate is being reduced to 5.1% from 1 January 2025.

Other Measures

  • The universal relief of €10,000 to the OMV for vehicles in Category A-D is extended for a further year to end 2025.
  • The Capital Acquisitions Tax thresholds are being increased as follows.
    • Category A threshold €400,000
    • Category B threshold €40,000
    • Category C threshold €20,000
  • Two new audio-visual incentives are being introduced. Both require European Commission approval.
    • A Corporation Tax credit for expenditure on unscripted productions. The credit will be granted at 20% of the expenditure up to a limit of €15m per project.
    • Scéal Uplift for film production up to a maximum expenditure of €20m. This incentive will form part of section 481 Film Relief.

Read our tax team’s analysis of Budget 2025.

/by

Special Assignee Relief Programme (“SARP”)

,

Special Assignee Relief Programme (“SARP”)

The Special Assignee Relief Programme (“SARP”) was introduced in Ireland in 2012 to encourage the relocation of key talent within organisations to Ireland.

The SARP programme provides for income tax relief on a proportion of income earned by employees coming to work in Ireland.  Where certain conditions are satisfied, an individual can make a claim to have 30% of employment income over €100,000 up to €1,000,000 disregarded for income tax purposes.  The relief is available for five consecutive tax years.

In determining whether an individual is entitled to the relief, the amount of compensation, excluding the following items must exceed €100,000:

  • Bonus payments,
  • Benefit-in-Kind including company cars and preferential loans,
  • Share based remuneration,
  • Termination/ex-gratia payments.

The relief only applies to income tax (PAYE) and does not apply for USC or PRSI.

How is relief granted?

SARP relief can be claimed on a real-time basis via the PAYE system, rather than waiting for the tax year-end to make a claim. While claiming SARP relief, an individual is considered a chargeable person for Irish income tax purposes and is therefore required to file a Form 11 tax return for each year of entitlement.

Example:

Francesco arrived to Ireland on 1 January 2024 and meets all the conditions to claim SARP relief. Francesco is single and his base salary is €150,000.

€
Schedule E income 150,000
SARP Relief (15,000)
Taxable income 135,000
 
Total Income tax liability 41,850
Total USC liability 8,503
Total PRSI liability 6,000

Francesco’s marginal income tax rate in Ireland is 40%, so the income tax saving is €6,000 (€15,000*40%).

Other Benefits of SARP

Employees who qualify for SARP relief are also eligible to receive one tax-free home leave trip per annum, including their family. School fees paid by the employer, capped at €5,000 per annum for each child, can also be paid tax-free.

Application Process

Qualifying individuals must complete a SARP 1A application for this relief within 90 days of arrival in Ireland.  The employee must have a PPSN to complete the application. They must also have registered their employment with Revenue through their MyAccount before approval for SARP will be issued.  From 1 January 2024, the SARP 1A application can be certified through an online e-portal which is available through ROS.

It is important to note that making a claim under SARP will negate other possible claims which may reduce tax e.g. a Foreign Earnings Deduction, Trans-border Relief, R&D (Research & Development) incentive. Employees should therefore take care before making a claim to ensure the relief provides the best tax outcome for them.

Reporting Obligations for Employers

An employer must submit an annual return to Revenue by 23 February, to provide the following information for all qualifying employees:

  • PPS Number
  • Nationality
  • Prior country of residence
  • Job title/role
  • Remuneration information (including any reimbursed school fees/home leave trips)

In addition, the annual return must set out the increase in number of employees employed or retained as a result of the qualifying employees working in Ireland.

From 01 January 2024, employers can submit the 2023 Employer Return and all subsequent years through the online eSARP portal.

If you have any questions in relation to SARP relief, or require assistance with preparing a Form SARP 1A application or annual SARP Employer returns, please contact us for assistance.

/by

Crowleys DFK Announces Strategic Merger with MoyleRoe

 

Crowleys DFK Announces Strategic Merger with MoyleRoe

Pictured (l-r): James O’Connor (Managing Partner, Crowleys DFK), Conor Ward (Managing Director, MoyleRoe) and Edward Murphy (Partner & Head of Tax, Crowleys DFK)

Crowleys DFK, a leading accounting and business advisory firm, is pleased to announce its merger with Dublin-based MoyleRoe, a well-respected accounting firm known for its expertise in the aircraft leasing sector.

The combined firm will operate under the Crowleys DFK brand. Conor Ward, the current Managing Director of MoyleRoe will join Crowleys DFK as a Partner bringing valuable insights and leadership to the firm. Together with his team from MoyleRoe, Conor will lead a specialised Aviation Advisory Services’ Department, offering a full range of services to clients in the aircraft leasing sector.

This strategic merger represents a significant milestone in the ongoing growth and development of Crowleys DFK.

James O’Connor, Managing Partner of Crowleys DFK, commented:

“We are delighted to welcome Conor and his team to Crowleys DFK.

By joining forces with MoyleRoe, we are enhancing our ability to offer new sector expertise and extend our services to a wider client base. This merger seamlessly aligns with our existing specialisations and strategic vision. MoyleRoe’s forward-thinking and personalised approach, strongly resonate with Crowleys DFK’s values. We are very excited about the opportunities and growth prospects that this next phase brings for our firm.”

Conor Ward, Managing Director of MoyleRoe, added,

“By merging with Crowleys DFK, we gain access to their extensive team of skilled professionals, cutting-edge technologies, and global network through DFK International. This means we can offer our clients enhanced services and innovative solutions tailored to meet their evolving needs. We are truly excited about the vast opportunities this merger presents for us and our clients alike.”

View our Aviation Advisory Services

/by

Charities Amendment Act 2024 – What You Need to Know

,

Charities Amendment Act 2024

What is the Charities (Amendment) Act 2024?

In July of this year, the Government passed the Charities Amendment Act 2024. This Act, which introduces a range of amendments and updates to the Charities Act 2009, the Charities Act 1961, and the Taxes Consolidation Act 1997 respectively, amounts to a wide-reaching reform of charity governance. The Act has also expanded the powers of the Charities Regulator with a view to ensuring that financial regulation of the charities sector, as well as regulation of the sector broadly, can be conducted on an appropriate basis.

The Amendment Act is an extensive document and contains 38 separate amendment areas. Tracking these amendments across the Acts will be a complex process. In this article we go through a few key areas covered in the Act, including:

  • Duties and definitions of trustees
  • Financial regulations
  • Role of “Human Rights” in charity sector
  • Charities Regulator

What are some key changes?

Trustee Definitions:

Under the Amendment Act, new definitions of who counts as a charity trustee and what their duties are, have been established. Section 3A of the Act makes explicit that a company secretary is not considered to be a charity trustee, unless they are also a Board member or sit on the governing body. This clarifies an ambiguity in the previous Act. The Act also sets out the duties falling to charity trustees. The duties include requirements to act in good faith for the charity’s best interests and to avoid conflict between personal and charity interests.

Financial Reporting:

There have been a range of changes to how charities must conduct financial reporting. Reporting thresholds and exemptions have been moved or redefined, new regulations have been introduced, and new alternative reporting methods are now available.

For instance, a charitable organisation, that is not a company and which also falls below a gross income or expenditure threshold of €250,000, is no longer obliged to prepare a statement of accounts. Such an organisation may instead prepare an income and expenditure account in respect of, and a statement of the assets and liabilities of, the charitable organisation.

On the other hand, a charitable organisation that is a company must now prepare financial statements in accordance with the Companies Act 2014.

Many of the financial reporting requirements included in the Amendment Act are similar to the requirements of the Charities SORP (Statement of Recommended Practice). However, the Charities SORP is not explicitly referenced in the Amendment Act and so Charities are not currently required to meet it. Charities should continue to be aware of the Charities SORP, as the Amendment Act does leave room for further regulatory changes that could include introducing the Charities SORP.

Definition of Charity:

The new Act provides an expanded definition of the activities which can be considered to be done for a charitable purpose. The phrase “any other purpose that is of benefit to the community” which was previously used in this definition has been replaced by a list of fourteen (14) activities. These include, for example, protection of the natural environment and the advancement of human rights. Organisations engaged in these activities will now count as charities.

Charities Regulator:

The Charities Regulator has also acquired new powers under the Amendment Act. Any Charity wishing to change its constitution, for example to alter its charitable purpose or its income and property clause, must now apply to the Regulator.

New powers of enforcement and punishment have also been provided to the Regulator, where a Charity fails to meet the new requirements.

What should you do to respond?

The changes brought about by the Amendment Act are extensive and will require adjustment from Charities. Listed below are some actions you may consider taking now to help ease the transition into the new regulatory environment:

Are you a Charity?

Bodies should review the new definitions of what is considered a charity. The Act requires that any organisation that becomes a charitable organisation by virtue of these new definitions must apply to the Regulator to register as a Charity within six months. In turn this will also require that organisations now falling under the Charity Act may have to amend their internal organisation to meet the Act’s requirements.

Who are your trustees?

Changes to the definitions of who is and is not a trustee will require charities to update their register of trustees and other governing documents to account for this.

How do you conduct financial reporting?

Charities should review the amended requirements for financial reporting and determine where they fall on the new thresholds for reporting. For instance, the Amendment Act has raised the threshold requiring that the accounts of a charitable organisation be audited from €500,000 to €1,000,000. On the other hand, while the previous Act exempted a charitable organisation that is a company from this audit requirement, this exemption has now been removed.

Conclusion

Tracking these amendments will be pressing work. It should be noted as well that these requirements are coming into effect immediately. The deadline to register as a charity, under the new definitions, is already approaching.

Crowleys DFK are on hand with their subject matter specialists to provide expert guidance and support in maintaining compliance with the Amendment Act. Please contact us for further information.

/by

New Angel Investor Relief for Ireland

New Angel Investor Relief for Ireland

Finance (No. 2) Act 2023 introduced a new Capital Gains Tax (CGT) relief, “Relief for Investment in Innovative Enterprises” or “Angel Investor Relief”. Angel Investor Relief will allow angel investors to avail of an effective reduced rate of CGT of 16% or 18% for partnerships on the sale of an investment in an innovative start-up SME. The relief can be applied on a gain of up to twice the value of their initial investment and is subject to a lifetime limit of €3 million.

Before seeking investment, the company must submit its business plan to Revenue. If, following consultation with Enterprise Ireland, Revenue are satisfied, they will issue a certificate of going concern and a certificate of commercial innovation to the company. These certificates of qualification are given by the company to the investor to enable them to claim the relief.

There are conditions for both the investor and company to satisfy before the relief will apply:

An individual investor:

  • Cannot be connected with the company when they make the investment, i.e. they cannot be an employee or director of the company and cannot control the company.
  • Must retain the shares for a period of at least 3 years.
  • Must invest cash of at least €20,000 or at least €10,000 where the shares held by the individual represent at least 5% of the ordinary share capital of the company.
  • Cannot hold more than 49% of the company’s ordinary share capital in total.
  • Must retain a copy of the certificates of qualification that were valid on the date of investment.

The company must:

  • Be incorporated and tax resident in Ireland, another EEA State or the United Kingdom.
  • Carry on or intend to carry on its trading activities from a fixed place of business in Ireland.
  • Be an “innovative enterprise” i.e.
    • One that can demonstrate, by means of an evaluation carried out by an external expert that it will in the foreseeable future develop products, services or processes which are new or substantially improved compared to the state of the art in its industry, and which carry a risk of technological or industrial failure, or
    • the research and development costs of which represent at least 10 % of its total operating costs in at least one of the three years preceding the granting of the aid or, in the case of a start-up enterprise without any financial history, in the audit of its current fiscal period, as certified by an external auditor;
  • Be a company that it is reasonable to consider intends to, and has sufficient expertise and experience to, implement the business plan.
  • Be less than five years old and be unlisted.

Angel Investor Relief is currently subject to a Ministerial Commencement Order. Currently, the relief will be applicable to the disposal of eligible shares issued on or before 31 December 2026. It applies on a sale of the entire investment to a third party. It does not apply to buybacks or redemptions effected by the company itself. It cannot be claimed in conjunction with retirement relief and revised entrepreneur relief.

As a new tax relief yet to be signed into operation, it remains to be seen whether Angel Investor Relief will achieve its aims to assist SMEs in attracting investment and to make Ireland a more attractive location for angel investors.

If you have any queries about Angel Investor Relief, please contact us.

/by

Global Mobility Social Security Update: Framework Agreement on Cross-border Telework

,

Framework Agreement on Cross-border Telework

Since the COVID-19 pandemic, there has been a significant shift in the way people work, with many employers now operating a hybrid approach to working. Cross-border teleworking can bring a lot of risks and challenges to both employees and employers, not only in the context of tax obligations but also in the determination of the applicable social security legislation.  Under EU regulations for cross border workers, where an employee works for at least 25% of their time in their State of Residence, the social security obligation would shift from the Employer State to the State of Residence.

In 2023, 18 EU countries entered into the Framework Agreement on EU cross-border teleworking.  The framework agreement follows Article 16 of Regulation (EC) No. 883/2004 on the coordination of social security systems, and provides that teleworking in an employee’s residence state will not be taken into account for determining the applicable social security legislation if it accounts for less than 50% of the employee’s working time.

There are now 22 countries who have signed the agreement, with Ireland signing up to the new Framework on 20 May 2024. This is effective from 1 June 2024.

Conditions:

The new agreement will apply if both member states involved have adopted the framework agreement and the following conditions are met:

  • The employee has one employer or multiple employers with a registered office in the same member state;
  • The employee habitually works in the member state of the registered office of the employer and teleworks in the residence state; and
  • The employee’s teleworking time is less than 50% of his or her total working time.

If the conditions are met, the social security legislation of the member state of the employer’s registered seat would continue to apply.

Application and Procedure:

A request for an A1 certificate must be submitted in the member state where the employer has its statutory seat. Requests can be filed for future periods only.  Retrospective applications may only be granted in limited circumstances.

Example:

Mark is working in France for a French employer since 2018. He has always worked 2 days from home in Germany and has been subject to the German scheme since 2018 (substantial activity). On 1 January 2025 his employer asks for an exemption under the Framework Agreement for the coming two years. The Framework Agreement applies and therefore the agreement is considered pre-given allowing France to immediately issue the A1 certificate as competent Member State.

Our View:

In a world where hybrid working is becoming more prevalent, this is a positive update and provides greater flexibility in managing the social security implications for cross-border workers.

It is important to note that the UK have indicated that they will not sign the framework agreement, which is disappointing given the number of cross-border workers between Ireland and the UK.

/by

Increased Size Thresholds to Assist Irish SMEs with Audit & Reporting Requirements

,

Increased Size Thresholds to Assist Irish SMEs with Audit & Reporting Requirements

The European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024 were signed into law, increasing the balance sheet and turnover thresholds for “micro”, “small”, “medium” and “large” companies and groups under the Companies Act 2014 by 25% to account for inflation.

This change means more Irish companies will move into the micro and small categories and may benefit from abridged reporting and audit exemption. It will also reduce regulatory and administrative burden.

The changes may also result in companies falling outside the scope of reporting obligations imposed under the Corporate Sustainability Reporting Directive (CSRD).

The new thresholds are as follows:

Micro Company thresholds:

  • Balance sheet total not exceeding €450,000 – (previously €350,000)
  • Turnover not exceeding €900,000 – (previously €700,000)
  • Average number of employees does not exceed 10 – (unchanged)

Small Company thresholds:

  • Balance sheet total not exceeding €7.5 million – (previously €6 million)
  • Turnover not exceeding €15 million – (previously €12 million)
  • Average number of employees does not exceed 50 – (unchanged)

Small Group thresholds:

  • Group balance sheet total not exceeding €7.5 million net or €9 million gross – (previously €6 million net or €7.2 million gross)
  • Group turnover not exceeding €15 million net or €18 million gross – (previously €12 million net or €14.4 million gross )
  • Average number of Group employees does not exceed 50 – (unchanged)

Medium Company thresholds:

  • Balance sheet total not exceeding €25 million – (previously €20 million)
  • Turnover not exceeding €50 million – (previously €40 million)
  • Average number of employees does not exceed 250 – (unchanged)

Medium Group thresholds:

  • Group balance sheet total not exceeding €25 million net or €30 million gross – (previously €20 million net or €24 million gross)
  • Group turnover not exceeding €50 million net or €60 million gross – (previously €40 million net or €48 million gross)
  • Average number of Group employees does not exceed 250 – (unchanged)

Large Company and Group thresholds:

  • Exceeds the thresholds for a Medium Company or Group as outlined above.

These new thresholds are effective from 1 July 2024 and will apply for financial years commencing 1 January 2024, enabling companies to benefit immediately. Companies also have the option to elect to apply the new thresholds for any financial year commencing on / after 1 January 2023.

If you have further queries on what this means for your business, please contact us.

/by

Close Relative Loans – New Capital Acquisitions Tax (CAT) Reporting Requirements

,

Close Relative Loans – New Capital Acquisitions Tax (CAT) Reporting Requirements

With effect from 1 January 2024, a new mandatory Capital Acquisitions Tax (CAT) reporting obligation is imposed on the recipients of certain loans from close relatives. This applies irrespective of whether any tax is due or not and is applicable to both new loans made from 1 January as well as existing loans.

This new requirement aims to provide Revenue with greater visibility of loans made between close relatives where the loans are either interest free or are provided for below market interest rates.

Who is a Close Relative?

A close relative is a person within either the Group A or Group B CAT tax free threshold category which includes:

  • a parent of the person,
  • the spouse/ civil partner of a parent of the person,
  • a lineal ancestor of the person,
  • a lineal descendant of the person,
  • a brother or sister of the person,
  • an aunt or uncle of the person, or
  • an aunt or uncle of the spouse/ civil partner of a parent of the person.

There are certain “look through” provisions that must be applied to loans made by or to private companies, including where the shares in the company are held via a trust, to determine if the loan is ultimately being made to a recipient by a close relative. The holding of any shares in a private company is sufficient for the look through provisions to apply.

What Loans must be Reported?

A loan is any loan, advance or form of credit and need not be in writing. The recipient of a loan will be required to file a CAT return where:

  • A loan has been made directly or indirectly between close relatives,
  • No interest has been paid on the loan within 6 months of the end of the calendar year, and
  • The total balance outstanding on the loan exceeds €335,000 on at least 1 day in a calendar.

All specified loans must be aggregated so if a person has more than one loan from different close relatives the amount outstanding on each loan in the relevant period must be added together for the purposes of determining if the threshold amount to €335,000 has been exceeded or not.

What Information must be Reported?

The CAT return must include the following information in respect of reportable loan balances:

  • The name, address and tax reference number of the person who made the loan,
  • The balance outstanding on the loan, and
  • Any other information which the Revenue Commissioners may reasonably require.

Case Study

A father and mother provide an interest-free loan of €400,000 to their son on the 31 March 2024. The son made no repayments on the loan in 2024.

On the receipt of an interest free loan of €400,000, the son is deemed to receive an annual gift of the free use of this money on the 31 December 2024. Irish Revenue value the annual gift at the highest rate of return the funds would generate if they were invested on deposit. Based on current interest rates applicable to a standard demand deposit account, one of the highest rates of return for a deposit account is 1.5%. As such, the value of the annual gift of notional interest is approximately €6,000 per year. After applying the annual small gift exemption of €3,000 per parent (€6,000 in total), the son is exempt from paying CAT on the notional annual gift in respect of this loan.

However, as the balance of the loan on 31 December 2024 exceeds the tax-free threshold of €335,000, the son is still required to file a CAT return under the new reporting provisions irrespective of the fact that no CAT is payable. The CAT return must be filed with Revenue no later than 31 October 2025.

Should you require any assistance in this area, please contact us.

/by

Crowleys DFK Celebrates New Partner Appointments

Crowleys DFK Celebrates New Partner Appointments

Crowleys DFK is delighted to introduce its newest Partners, Shane Moloney from our Consulting Department and Kim McCarthy from our Practice Development Department.

Shane Moloney Promotion to Partner

Since Shane joined the firm as an intern in 2011, he has led technology and data-driven innovations in both client services and internal operations. With his transformative mindset, leadership, and dedication, he delivers excellent consulting services, specialising in business process improvement, financial planning, strategy, forecasting and expert advice to achieve financial and operational goals.

 

 

Shane commented:

“I am thrilled to have reached this milestone in my career, a journey that would not have been possible without the invaluable support and guidance of my colleagues and mentors. Since joining Crowleys DFK as a trainee, I have been fortunate to benefit from the firm’s excellent career development opportunities. I am excited to continue working closely with our growing team to deliver innovative and best-in-class services to our clients.”

Kim McCarthy Promotion to Partner

Since joining the firm in 2008, Kim has played a pivotal role in expanding our firm’s reach and client base across all departments and in developing our specialisms and brand. Over the years, she has shown consistent leadership in enhancing our firm’s reputation and market presence, while also making significant contributions to our strategic plans.

 

 

 

Kim commented:

“I’m delighted and deeply honored by my promotion to Partner. Since joining the firm, I have had the privilege to work with incredibly talented teams that have continuously inspired and supported me. I’m excited to continue championing our values, empowering our people and proving leadership in growing our firm.”

Crowleys DFK Celebrates New Partner Appointments

Today’s announcement underscores Crowleys DFK’s dedication to nurturing career growth for our team while delivering specialised expertise and exceptional service to our clients.

 

 

 

 

 

 

 

Managing Partner, James O’Connor, shared:

“We are incredibly proud to announce Shane and Kim’s promotions to Partner. Their remarkable contributions and unwavering commitment to our firm’s growth and success have been truly outstanding. Shane’s expertise in technology-driven innovations and strategic consulting, and Kim’s strategic vision and leadership, have significantly strengthened our firm’s capabilities and market share. We are confident that, as Partners, they will continue to drive excellence and inspire our teams to achieve new heights.”

/by

Research & Development (R&D) Tax Credit – What is it and how can it be claimed?

,

The R&D tax credit was introduced to incentivise large multinationals to locate an R&D unit here and to encourage Irish companies to invest in R&D activities.

Where a company meets the criteria to qualify for the R&D credit, it will be entitled to claim a tax credit equivalent to 30% of eligible expenditure incurred by it on qualifying R&D activities. As the claimant should also be entitled to claim a tax deduction at the standard rate of corporation of 12.5% on the same expenditure, it should result in an effective corporation tax benefit of 42.5%.

Changes from 2024

For accounting periods commencing from 1 January 2024, new rules have been introduced in Budget 2024. The main changes include the following:

  • The R&D credit is increased from 25% to 30%
  • The first payment instalment has been increased from €25,000 to €50,000
  • The company must now provide pre-notification of intention to make an R&D tax credit claim

Is my company eligible to claim the R&D credit?

In order to qualify for the R&D tax credit the following must apply:

  • The applicant must be a company
  • The company must be within the charge to Irish tax
  • The company must undertake qualifying R&D activities either within Ireland or the EEA

The expenditure on which the company is making the claim must be wholly and exclusively incurred in the carrying on by it of qualifying R&D activities. As per Revenue guidance, it is crucial that claimants distinguish the term “carrying on” from “for the purposes of” or “in connection with”. Indirect costs such as recruitment fees, insurance and travel costs, which are not wholly and exclusively incurred in the carrying on of the R&D activity do not qualify as relevant expenditure.

Typically, expenses which qualify for the R&D credit include materials, salary costs, subcontracted R&D and plant and machinery.

What are qualifying activities for the purposes of the R&D credit?

Qualifying activities must:

  1. Be systematic, investigative or experimental activities;
  2. Be in a field of science or technology;
  3. Involve one or more of the following categories of R&D:
    • Basic research
    • Applied research
    • Experimental development
  4. Seek to achieve scientific or technological advancement; and
  5. Involve the resolution of scientific or technological uncertainty.

Essentially, the R&D activities being carried out must address an area of technological or scientific uncertainty where the outcome is unclear from the outset.

Claiming the R&D Tax Credit

Under the new R&D system which was introduced in Budget 2023, for periods commencing on 1 January 2023, a company will have an option to request either payment of their R&D tax credit or for it to be offset against other tax liabilities which will provide greater flexibility to the claimant.

Where a company opts to have the credit refunded, it will be refunded as follows:

  • The first €25,000 (for accounting periods beginning on or after 1 January 2023) or €50,000 (for accounting periods beginning on or after 1 January 2024) of an R&D claim will now be payable in full in year 1.
  • In year 2, the second instalment will equal three-fifths of the remaining balance.
  • The third and final instalment in year 3 will in effect be the remaining balance.

A company will have the option to specify whether the R&D corporation tax credit is to be offset against the company’s tax liabilities or is to be paid to the company. Under the new regime, the option is there to offset against any tax liability, such as PAYE Employer liabilities or VAT liabilities.

In addition to the above, the current limits on the payable element of the credit will be removed as part of the new system.

Pre-notification

With effect from 1 January 2024, companies who wish to claim the R&D tax credit and it is either their first tax credit claim or it has been more than 3 years since their last claim, there is now a requirement to notify Revenue of their intention to make the claim. This must be done 90 days prior to making the claim.

The company must do this in writing and the information required is as follows:

  • Name, address and corporation tax number of the company;
  • Description of the research and development activities carried out by the company;
  • Number of employees carrying on research and development activities; and
  • Expenditure incurred by the company on research and development activities, which has been or is to be met directly or indirectly by grant assistance.

It is important that companies review their activities to determine if they qualify for the tax credit as the credit can prove to be a very valuable source of funding.

If you have any queries about the R&D tax credit, please contact us.

/by