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Tax Savings for SMEs
by Sinead Herlihy

Research & Development

The R&D tax credit is available for companies carrying on R&D activities in the European Economic Area (EEA) in a relevant period.

From 1 January 2009 the R&D tax credit has increased from 20% to 25% of the qualifying R&D expenditure spend.

The definition of research and development activities is extensive and includes systematic, investigative or experimental activities in the field of science or technology. If you require any assistance in deciding whether your company qualifies for the R&D tax credit please do not hesitate to contact us.


100% Capital Allowances in year 1 for Energy Efficient Equipment

Certain energy efficient equipment qualify for 100% capital allowances in year 1 rather than spreading the cost over a number of years. There is a list of specific qualifying equipment which includes catering and hospitality equipment, electric vehicles and IT systems. If you are planning on purchasing energy efficient equipment in the near future, please contact us to see if it qualifies. Note this applies to companies only - not sole traders.


Exemption for Start-up Companies

Qualifying new companies are exempt from Corporation Tax for the first three years, provided the Corporation Tax liability is less than €40,000 per annum - marginal releif available.


Trading Losses


Did you know that trading losses can be used in the following ways?

1. Offset against the total profits of the company’s current accounting period (income from all sources plus chargeable gains excluding gains on development land).

2. Carried back and set against profits of the immediately preceding accounting period(s) of the same length as the accounting period in which the loss was generated where the company was carrying on the same trade in those period(s) also.

3. Carried forward, without time limit, and set against profits from the same trade in subsequent accounting periods.

Note: in order to benefit fully from the use of trading losses the company’s corporation tax returns will need to be filed on time with the Revenue Commissioners. Otherwise Revenue will restrict the use of such losses.


Terminal Loss

Where a company incurs a loss in its last period of trading, terminal loss relief provides an element of relief in these situations by providing that losses incurred in the last year of trading can be carried back against income from the same trade in the 3 years preceding those last 12 months.

 

If you require any advice on the above, please do not hesitate to contact us on 021 4310266.

 

 

 

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