Public consultation on the Research & Development tax credit

Forvis Mazars responds to Government consultation on R&D tax credit

It includes a commitment to examine options to enhance the Research and Development (R&D) tax credit, reward innovation and digitalisation and to encourage innovation by domestic and international companies.

In April 2025, the Department of Finance launched a public consultation on the R&D tax credit regime. As a leading advisor in this space, Forvis Mazars welcomed the opportunity to contribute. We conducted an extensive survey of our clients and submitted a detailed response to the government, reflecting both client feedback and our professional insights.

Key findings from our client survey

Positive developments

• Impact of recent reforms: 58% of respondents indicated that the enhancements introduced in recent Finance Acts - such as the increase in the R&D tax credit rate to 30% and the higher first-year payout - have encouraged additional R&D investment.
• Growth outlook: 66% of businesses expect an increase in R&D activity in the short to medium term, reflecting both ongoing and planned projects.
• STEM talent expansion: 58% of respondents reported an increase in the proportion of their workforce with STEM qualifications, highlighting the role of R&D in driving skilled job creation.

Ongoing challenges

• Barriers to R&D activity: High operational and labour costs, along with difficulties in accessing skilled talent, were identified as the most significant obstacles to sustaining R&D efforts in Ireland.
• Amendments to current regime sought by respondents: Expediting the payout of the R&D tax credit refunds due, broadening the scope of the R&D tax credit to include innovation and increasing the amount of the first-year payment were identified as the most important changes sought to the current regime.

Additional observations

As part of the consultation, respondents were asked about specific government objectives that a support should target. Respondents ranked AI / emerging technologies, digital transition initiatives and green initiatives / circular economy as recommended areas for consideration.

Our recommendations to the Government

In our submission, we highlighted several areas where the regime could be improved:

• Faster payouts: The top priority for businesses is quicker and more predictable credit refunds. Delays can significantly impact cash flow, particularly for smaller firms.
• Broadening innovation support: We advocated for a more inclusive definition of innovation that recognises both breakthrough and incremental advancements, with targeted support for AI, digitalisation, and sustainability.

Looking ahead

The consultation process is a valuable opportunity to shape a more effective and responsive R&D tax credit regime. At Forvis Mazars, we remain committed to supporting our clients and advocating for a system that fosters innovation, competitiveness, and long-term growth.

If you would like to learn more about our submission or how the proposed changes might affect your business, please get in touch with our team.