‘The need for constant innovation is essential. There’s no standing still’

‘The need for constant innovation is essential. There’s no standing still’

As potential shocks to the system such as Brexit loom large, Research, Development and Innovation (RDI) is increasingly seen by Irish companies as both a path to the future and a hedge against risk, says BDO’s Derek Henry.

“We know what the research and our experience tells us: innovative companies make the growth and sustain longer life-cycles,” said Henry.

“That’s always been the case, but everything moves at a much faster pace now – the need for constant innovation is essential. There’s no standing still.

“And we can see that from multi-nationals down to SMEs and indigenous Irish companies that are looking to compete globally. The opening of global markets bring great opportunities, but there is a threat side to it as well. We know from the best companies that we work with, you have to be cutting-edge, to keep pace with or stay ahead of the innovation that is going on in your sector”.

As a partner at BDO, where he is head of R&D tax services, Henry’s work is focused in the area of RDI tax credits and the more recently introduced Knowledge Development Box (KDB), which can allow firms to as much as halve the corporation tax they pay on income as long as it is generated from research and development conducted here.

And as its work involves a lot of interaction with clients from a science and technology background, BDO have decided to hire in some boffins of their own.

“To qualify for these tax credits you have to be involved in R&D activity, with that in mind, we have taken an engineer-first approach,” says Derek Henry.

“I have a team of engineers here, a good mix of people with academic and industry qualifications and experience in various types of engineering, who will go out to clients, sit down with them and have a good look at their activities and identify where work will qualify for the RD tax credits and just as importantly, where it will not”.

“What we try and do is help clients understand, in a very practical sense, how they can apply the law to their activity, so they can find that sweet spot. And we found that engineers talking to engineers, on a peer-to-peer level, is a lot more of an efficient for our clients than having to explain to an accountant how what they are doing represents a technological advancement.”

Henry says companies hoping to benefit from tax credits should be fully aware of the qualifying criteria and administration involved.

“Revenue obviously want to ensure the integrity of the scheme – it’s up to us to give our clients a full project management service, start to finish,” he says. “We will build on the systems, the contemporaneous documents they have, and help present it an efficient way, so that their engineers are spending their time creating projects – not bogged down in paperwork to claim R&D tax credits”.

“They want to spend their time working an innovating, our task is to allow them to do just that, while making sure the work qualifies for the credits available.”

Originally published by the Sunday Business Post.

Please click here to learn more about how BDO can assist your business in claiming R&D tax credits.