Your trusted adviser for R&D Tax Credits and R&D Grants
Learn how to pass the Science Test for R&D Tax Credits in Ireland and get expert tips on meeting Revenue's criteria and ensuring your R&D claim is robust.
Technical Analyst/Writer
Published on: 05/11/2024
Last updated on: 16/10/2026
10 minute read
R&D tax credits are a lifeline to many Irish companies, offering up to 35% back on qualifying project costs. But how do you know if you qualify?
In the event of an R&D Aspect Query from Revenue, companies need to prove that they meet the Science Test and the Accounting Test. The former ensures that your R&D activities qualify under Revenue’s definition and the latter is to confirm that the costs have been correctly claimed. Both tests form part of an enquiry into an R&D tax claim and are conducted by Revenue’s experts.
Claimants need to pre-emptively confirm that they pass both tests. Though they are officially part of Revenue’s examination into an R&D tax claim, they are a great way to confirm a project’s eligibility before making a claim.
The Accounting Test is covered here.
The Science Test is how Revenue ensures that a claim qualifies in terms of the activities claimed. In an investigation, a technical expert appointed by Revenue will review the work done by the company in an on-site visit. This involves discussion with the project technical leads and a review of the evidence of the work.
Revenue can bring in an independent expert at the beginning of a review, but sometimes an expert will only be needed at a later stage, or not at all.
The project leads will need to present a robust case for how the projects meet the qualifying criteria and back this up with contemporaneous evidence.
The key questions you need to answer are:
Some grant-funded projects and companies taking part in regulated clinical trials won’t need to worry so much about this test; more details on this can be found below.
R&D is defined as systematic, investigative or experimental activity to overcome uncertainty and advance the field of science or technology.
Of course, the legislation has more criteria than just the above. Projects need to be in an eligible field of science or technology (which basically excludes the social sciences, arts and humanities). They must also be an eligible type of research.
An advance in science or technology is one of the key indicators of eligible R&D. It involves developing new or improving upon the existing knowledge, understanding and capabilities of a field. This may sound vague, and it’s meant to, as R&D can happen in nearly any field.
It’s relatively easy to identify an advance in research contexts; just look for the innovation grant funding. However, when a company is looking for a competitive advantage, it will sometimes develop new capabilities within the field which can also qualify.
However, Revenue is clear that the advance must be in the wider field, and not just in your company’s own knowledge. This means that a company bringing itself up to speed with the wider field can’t claim for this, even if it is a significant improvement internally.
For example, Company A adapts an existing software tool for use in its own product, which makes a huge improvement to their internal efficiency. However, since the technology already existed and has not been materially improved during its implementation, Company A cannot claim for this work. There is no advance to the wider field.
Some claimants will confuse product development with R&D. Although product development may include R&D, it is not guaranteed that the work done will be an improvement to the state of the art. Not all innovation is R&D.
Importantly, if the information about how to achieve this advance is already available in the public domain, then the work done isn’t R&D. However, if an advance has already been achieved, but the method is not in the public domain (for example, it is a trade secret or it has not been published), then the project may still qualify.
For example, Company B is trying to develop an electric motor for lorries. Other companies have achieved this before, but the specifics of how they have done it are not available. Therefore, the work that Company B does is an advance in the field as there is no information in the public domain about how to achieve this goal.
An R&D project must also try to resolve “scientific or technological uncertainty” to qualify. This basically means that the solution must be hard to work out. Your company should be taking on a risk trying to find a solution and there shouldn’t be any guarantee that you’ll find the answer.
There are two instances where uncertainty arises:
As with the advance, if the project leads can easily work out how to solve the problem, or if the solution is in the public domain (perhaps published, or available through online research), then the project won’t qualify.
In some cases, the difficulty won’t be solved by the company, and the project will be abandoned. One of the benefits of R&D tax credits is that these projects can still be claimed for. R&D still occurs, so long as the company is seeking to advance the state of the art and overcome the uncertainty.
It’s important to separate out business challenges from scientific and technological challenges. Commercial problems, including market research, aesthetic considerations, or legal challenges associated with patents, are not eligible.
For example, Company C begins a project to improve the moisture-wicking properties of its fabrics. However, it first conducts a customer survey as it is uncertain if customers will buy it. This activity is not directly related to improving the fabric’s properties and is only a commercial uncertainty, therefore cannot be included.
Small and micro enterprises with grant-funded projects can relax; Revenue agrees that the definition of R&D generally encompasses the work that is funded by Enterprise Ireland’s, Horizon 2020’s, Horizon Europe’s and IDA’s R&D grants.
This means that Revenue will not challenge the science test for projects where:
The Irish government recently announced a change that can help pharmaceutical companies breathe a bit easier. Though this isn’t yet enacted, Budget 2027 announced that if a clinical trial is regulated, that fact may be used to satisfy the Science Test.
Though the specifics have not yet been announced, pharmaceutical, biotech and medical device companies that take part in multinational trials can plan for their claim a little more effectively. The clinical trials measure will be provided for at Committee Stage, because the technical work on the legislation is still ongoing.
Revenue provides a full list of the records needed to pass the Science Test:
Some of the requirements above are repetitive, but it’s all crucial for you to be able to prove your project is qualifying and receive your entitlement as soon as possible.
This evidence may already be part of your practice. If not, you should make an effort to see where project tracking documents can be introduced. This may include a series of questions at the commencement of any project, to determine if R&D is expected. Alternatively, you may implement monthly check-ins which review last month’s work and what new uncertainties may have arisen.
Myriad’s team of dedicated specialists in R&D tax has experience in making claims from the micro to international scale and we know what’s needed to make a robust claim. Any claim we submit goes through rigorous review to ensure it passes the Science Test well before start thinking about submitting.
We offer a full consultancy service and an online guided portal, Tax Cloud, both of which offer best-in-class service and confirmation that your claim is as strong as it can be.
If you're looking to start your R&D tax claim, our R&D tax calculator can assess potential savings for your innovative project. For any specific questions, or to get started with our services, please contact us or call on 0207 118 6045.
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Please contact us to discuss how working with Myriad can maximise and secure R&D funding opportunities for your business.
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