R&D in Ireland is predicted to rise over the next three years, but do enough businesses know of the funding they can claim from the government to support their investments?
R&D investment in Ireland is set to rise
A recent survey into Ireland’s innovation landscape, led by the IRDG, suggests that 71% of companies plan to boost their existing R&D investment.
This would carry on the trend of higher R&D spending as the latest figures from Revenue show that the total value of R&D expenditure has risen year-on-year from 2018 to 2023, reaching €5,158m in the latest year (10% up from 2022).
While the news of ongoing investment is very welcome, the survey only focuses on businesses that are already performing R&D activities. It’s just as important that we see growth in the overall number of companies investing in R&D (which has been a lot more sluggish).
Between 2019 and 2022, the amount of companies claiming R&D Tax Credits barely changed. Only in 2023 did we see an 11% rise, but it’s vital that this momentum continues. Growth shouldn’t be confined to those who are already investing. We want to see more new companies claiming, as R&D Tax Credits represent the best way to fund even more innovation and business expansion, which helps to drive Ireland’s overall economic growth.
One third of innovators are missing out on R&D support
While R&D Tax Credits are designed to help fund innovation investment, only 64% of companies surveyed by IRDG said that they’d previously claimed. In other words, roughly a third of active innovators still aren’t taking advantage of the available government support.
The scheme allows companies to claim a credit or cash rebate for their eligible R&D expenditure, and it is set to become more valuable than ever, as the credit rate will rise from 30% to 35% for accounting periods beginning on or after 1 January 2026.
Despite this generous increase, there are still barriers preventing some from claiming that are worth examining. The clearest issue is overall awareness of the scheme, as 10% of companies surveyed said that they weren’t aware that any financial support was available.
39% cited concerns about the admin and time involved in making either R&D Tax Credits claims or R&D grant applications. 16% said that they didn’t believe their work qualifies for funding. Such worries aren’t uncommon, and as a result, many businesses are missing out on a valuable cash benefit to which they may otherwise be completely entitled.
The importance of R&D incentives
IRDG’s research pointed to the positive impact that R&D incentives have on businesses in Ireland. For those who received support:
- 61% said it allowed them to carry out more R&D
- 47% said it supported more employment
- 40% said it encouraged greater internal investment
- 30% said it enabled collaboration with third parties
- 28% said it provided access to additional expertise
- 25% said it facilitated export growth
These are tangible benefits, helping businesses to invest, improve their competitiveness and grow. It’s therefore so important that the reach of incentives like the R&D Tax Credits scheme are as accessible as possible, especially for Irish SMEs that lack the resources of larger enterprises.
Why the R&D Tax Credits scheme needs reform
We’ve already written about why we believe the R&D Tax Credits scheme needs reform. To help reduce the administrative burden on innovative businesses, we feel that Revenue needs to do more to:
- Modernise the R&D Tax Credits scheme
- Remove barriers to outsourcing R&D projects
- Simplify access to R&D grant funding
- Introduce a dedicated R&D Tax Credits division within Revenue
In the recent Budget 2026, Minister for Finance Pascal Donohoe announced that a “Research and Development Compass” was soon to be published, which would set out the path for improving innovation funding in Ireland. We hope that this document will tackle some of the issues that we’ve raised to help provide easier access for businesses to both R&D Tax Credits and R&D grant funding.
For Ireland to make the most of its innovation momentum, the next challenge is not just investing more in R&D, it’s ensuring that every business capable of innovating can access the support designed to help them succeed.
Our clients’ success stories
There’s no better way to learn about the benefits of R&D Tax Credits than reading our clients’ success stories:
John Paul Construction: John Paul Construction’s knowledge of R&D Tax Credits was limited, and they were concerned by the complexity of the claims process. We helped them identify eligible R&D activities and gave them the support they needed to maximise their claim.
EliteForm Manufacturing: EliteForm had previously made R&D Tax Credits claims, but their former accountant was unable to provide the same level of detail as our experts, which meant they were missing out on the full benefit. They were also concerned that a claim would raise the chances of a Revenue audit but were impressed by our focus on risk mitigation and dedication to compliance.
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