If It Sounds Too Good to Be True: Why R&D Tax Credit Claims Need Technical-Led Advice

A warning to Irish businesses considering R&D Tax Credit claims - and a practical guide to building claims that are robust, compliant and defensible.

Research and Development (R&D) Tax Credits remain one of the most valuable government incentives available to innovative businesses in Ireland. The regime exists to encourage companies to invest in technical advancement, product development, process improvement and problem-solving where genuine scientific or technological uncertainty is involved.

However, as awareness of the incentive has grown, so too has the number of providers promoting broad, simplified and sometimes risky messages about what qualifies. Businesses are increasingly being told that normal development work, routine product changes or large portions of staff time can automatically be included in a claim.

At Momentum Tax Group, our view is simple: a strong R&D Tax Credit claim should be technical-led, evidence-based and compliance-focused. The objective is not just to identify the largest possible claim. It is to help businesses access the relief they are genuinely entitled to while ensuring the claim can stand up to Revenue scrutiny.

R&D Tax Credits Are Valuable - But They Are Not Automatic

R&D Tax Credits are not intended to reward everyday business activity, routine commercial improvements or standard implementation work. To qualify, a company must be seeking a scientific or technological advancement and must be attempting to resolve uncertainty that could not be easily solved by a competent professional in the field.

This distinction matters. A project may be commercially valuable, operationally important or strategically successful, but that does not automatically make it qualifying R&D for tax purposes.

Momentum’s role is to help and support clients separate general business improvement from qualifying R&D activity. That means reviewing the technical challenge, the uncertainty faced, the approach taken to resolve it, the people involved, the expenditure incurred and the evidence available to support the position.

Be Careful of Overly Simple Sales Messages

Businesses are frequently approached with claims such as:

• “If you changed a recipe, you qualify.”
• “If you developed a new product, you qualify.”
• “You can include 33% of your staff’s salaries as standard of your workforce in the claim.”
• “We can guarantee you a claim” before reviewing the detail.

These statements should be treated with caution. Activities in food production, software, engineering, manufacturing and other sectors may qualify, but only where the legislative tests are met. The key question is not whether the business has been innovative in a general sense. The key question is whether the work involved qualifying scientific or technological uncertainty and whether the claim is properly evidenced.

 A credible advisor should be willing to challenge the claim, not simply maximise it. Momentum’s approach is to assess each project on its own merits, combining technical expertise with a strong focus on compliance, robust documentation, and evidential support. This gives clients a clear understanding of the opportunity available, while ensuring claims are prepared with the appropriate level of scrutiny, supporting evidence, and awareness of any associated risks.

Examples That Need Careful Technical Review

Many activities that are often marketed as qualifying can fall outside the R&D Tax Credit rules if they rely on existing knowledge, known methods or routine adaptation. The examples below are not automatic exclusions, but they should be reviewed carefully before being included in a claim.

Software

Software projects can qualify, but not every software build, integration or implementation is R&D. Activities that often require scrutiny include:

• Configuring or customising existing software systems
• Using supplier-provided APIs to connect established platforms
• Routine integrations using known methods
• Standard implementation, migration or deployment projects
• User interface or cosmetic changes without underlying technological advancement

The question is whether the project attempted to overcome a genuine technological uncertainty. Momentum’s technical review focuses on the challenge beneath the software outcome: what was uncertain, why existing methods were insufficient, what development work was undertaken and how the outcome was evidenced.

Manufacturing and Engineering

In manufacturing and engineering, a project may improve efficiency, quality or output without necessarily qualifying as R&D. Examples requiring careful review include:

• Building features that are already established in the industry
• Replacing manual assembly with an off-the-shelf robotic arm using supplier guidance
• Increasing production using known methods
• Changing dimensions, colour, appearance or standard materials
• Customer-specific adaptations that are not technically challenging
• Incremental product changes based on existing knowledge

Momentum helps businesses distinguish between operational improvement and qualifying technical advancement. This is particularly important where claims involve staff time, subcontractor costs, materials, prototypes or production trials.

Food Production

The food sector has become a particular target for aggressive R&D claim marketing. Businesses should be cautious where projects involve:

• Changing ingredients with known properties or predictable outcomes
• Reducing sugar, salt, gluten or similar components using established techniques
• Creating vegan alternatives through known substitutions
• Increasing batch sizes where the process is already known
• Standard shelf-life testing
• Routine reformulations, flavour changes or packaging adjustments

Some food innovation can qualify, especially where genuine scientific or technological uncertainty exists around formulation, stability, process performance or scalability. However, this cannot be assumed. Momentum’s technical specialists work with the client to understand what was genuinely uncertain and whether the evidence supports a claim.

The Claimant Company Carries the Risk

One of the most important points for directors and finance teams to understand is that the claimant company remains responsible for the accuracy and legitimacy of its R&D Tax Credit claim.

Even where a third-party advisor prepares the submission, Revenue will hold the company accountable if the claim is inaccurate, overstated or unsupported. Consequences can include repayment of credits, interest, penalties, Revenue enquiries, reputational damage and wider financial exposure!

This is why Momentum positions R&D Tax Credit work as a compliance-led advisory service, not a quick claims exercise. A claim should only be prepared with the expectation that it may need to be explained, evidenced and defended.

Warning Signs When Choosing an R&D Advisor

Businesses should be cautious of providers who:

• Guarantee eligibility before understanding the business
• Suggest that “everything qualifies”
• Promote aggressive staff cost percentages without detailed analysis
• Focus only on maximising claim value rather than compliance
• Offer low fees based on your turnover without understanding your activities
• Operate without experienced financial and technical specialists
• Avoid proper meetings, site discussions or technical interviews
• Pressure businesses to sign immediately
• Suggest you do not include your external accountant in the process

These behaviours can create claims that look attractive in the short term but are difficult to support if Revenue asks questions. A compliance-led advisor should be as interested in what does not qualify as what does.

Best Practice Approach: Technical-Led, Evidence-Based and Defensible

Momentum Tax Group’s R&D Tax Credit service is built around a practical, technical-led methodology. The aim is to give businesses confidence that their claim is accurate, well supported and aligned with Revenue requirements.

Our approach typically includes:

• Initial eligibility review to identify potential qualifying projects
• Technical interviews with relevant personnel
• Assessment of scientific or technological advancement and uncertainty
• Review of qualifying and non-qualifying projects and expenditure
• Staff time and cost apportionment based on evidence, not assumptions
• Preparation of technical narratives and supporting claim documentation
• Alignment with Revenue guidance and legislative requirements
• Advice on improving record-keeping for future claims
• Support if Revenue raises queries or opens an enquiry

This approach is designed to protect the client as well as identify value. The best R&D claims are not simply the largest claims. They are claims that are accurate, documented and defensible.

Cheapest Is Rarely Best

Professional advisory work should be judged on value, expertise and risk management - not price alone. When a provider competes mainly on cost, businesses should ask what level of technical work is being carried out.

Important questions include:

• Who is assessing the technical uncertainty?
• What industry experience supports the review?
• How are staff costs and other expenditure being calculated?
• What evidence will be retained to support the claim?
• What happens if Revenue reviews the submission?
• Are there experts on hand to meet with the Revenue?
• Is the provider focused on compliance or only on increasing claim value?

A properly prepared claim may require more work at the outset, but it delivers greater long-term value by reducing exposure and giving directors greater confidence in the position taken.

A Sensible Approach for Irish Businesses

R&D Tax Credits remain an excellent opportunity for genuinely innovative businesses. Companies should not be discouraged from claiming where they have qualifying activity. However, they should carry out due-diligence on potential partners who make the process sound automatic, risk-free or purely percentage-driven.

Before engaging an advisor, businesses should ask:

• How do you determine whether activity genuinely qualifies?
• Who prepares the technical analysis?
• What experience does your team have in our sector?
• How do you assess and evidence staff involvement?
• How do you support clients during Revenue enquiries?
• How do you help improve future R&D record-keeping?
• Can you explain the risks as clearly as the opportunity?

A trustworthy advisor will welcome these questions because they are central to preparing a robust claim.

Innovation deserves support, and the R&D Tax Credit regime plays an important role in encouraging businesses across Ireland to invest in development, growth and technical progress.

But businesses should remain cautious of overly broad promises, aggressive claim strategies and providers who treat R&D relief as a volume exercise rather than a technical and compliance-led process.

If it sounds too good to be true, it usually is.

At Momentum Tax Group, we believe in long-term, meaningful partnerships built on trust, transparency, technical expertise and full compliance. Our role is to help businesses identify genuine qualifying activity, prepare robust claims, strengthen documentation and give directors confidence that their R&D Tax Credit claims are defensible and aligned with Revenue requirements.

For a no-obligation review or a second opinion on your tax incentive claims, contact Momentum Tax Group on Dublin 1 265 4090 or our Head Office +44 (0) 28 9140 4030, or email tax@momentumtaxgroup.com.