Some of the most valuable parts of running a company aren’t things you’ll stumble across in a quick search. They’re reliefs that only get claimed if you know to ask, and legal obligations that only become visible once something has already gone wrong. SURE relief, R&D tax credits, and director’s duties fall into exactly that category.
SURE Relief: Turning Old PAYE Tax Into Start-Up Capital
SURE, Start-Up Relief for Entrepreneurs, lets you claim back Income Tax you already paid in previous years as a refund, to help fund your new company. It’s effectively the State handing back tax paid previously, to support the leap into self employment, and it’s one of the most valuable reliefs available to Irish founders, and one of the least claimed.
How it works: the relief can return up to 50% cash back from Revenue for every €1 you invest in the new company. You must be able to directly pay cash into the company in exchange for new shares. The amount of refund available depends on the levels of tax you’ve paid through employment previously, the more tax paid at higher rates, the more you could benefit. You can select the most advantageous year to claim against, out of the current year and the six most recent previous years, giving real flexibility.
Who qualifies:
- Mainly PAYE income over the previous four years
- Taking up full time employment in the new company as director or employee within a specified period
- Investing cash, not assets, in exchange for new shares
- Holding those shares for at least four years, since selling early triggers a clawback
- A minimum investment of €250, subject to annual and overall caps
- The company carrying on a genuinely new qualifying trade (professional services, land dealing, forestry, and speculative trading don’t qualify)
Where founders get caught out: the “mainly PAYE” test looks at your total income over the relevant years, not just your most recent job. A mix of PAYE and significant self employment income can complicate eligibility quickly, and it’s genuinely worth checking with an accountant before assuming you qualify. Co-founders can each claim independently, provided each separately meets the PAYE history requirement, invests their own cash for new shares, and holds the appropriate shareholding, but each person’s position has to stand on its own. And while converting a director’s loan into shares is technically possible, it’s a longer, costlier process than simply paying for shares directly with cash.
R&D Tax Credits: Broader Eligibility Than Most Founders Assume
People hear “R&D tax credit” and assume it’s only for labs and tech companies. It’s one of the most misunderstood reliefs in the whole system, and it isn’t limited to people in white coats.
The numbers: the credit is currently worth 35% of qualifying R&D expenditure, on top of the normal 12.5% Corporation Tax deduction for the same spend, an effective benefit of around 47.5% of what you spent. It’s available to any company carrying on qualifying R&D activity in Ireland, the EEA, or the UK, regardless of size or sector, and crucially it’s available even to loss making, pre-revenue companies, claimable as a cash refund rather than just a deduction against tax you may not yet owe.
What actually qualifies is wider than people assume. The legal test is systematic, investigative, or experimental activity in a field of science or technology, aimed at resolving a scientific or technological uncertainty. That can include a software company building a genuinely novel technical solution rather than just configuring existing tools, a manufacturer working through unsuccessful production trials to solve a technical problem, a food or drinks business developing a new formulation that requires genuine technical trial and error, or an engineering firm solving a problem where the answer wasn’t already known or readily available. It isn’t routine troubleshooting, configuration of off-the-shelf systems, or work where the answer was already known. The bar is genuine technical uncertainty, not simply “we built something new for us.”
The administrative trap that costs people the claim: if this is your first claim, or you haven’t claimed in the last three years, you must file a pre-filing notification with Revenue at least 90 days before submitting the claim. Miss that window and you cannot claim for that period, no matter how well documented the work is. This single deadline catches out more genuine claims than any technical eligibility question does.
The cash flow angle matters most for this audience. Companies can now claim up to €87,500 of a claim paid out in full in year one, with the balance staggered over two further years, a change specifically made to help SME and start-up cash flow.
The records that matter, starting now rather than at year end, are project descriptions setting out the technical uncertainty being addressed, the approach taken, and the outcome; time records for staff involved, where someone spends 95% or more of their time on qualifying R&D their full salary can now count as qualifying expenditure; and a clear separation of qualifying costs from any grant funding received for the same work.
Director’s Duties: What You’re Legally On the Hook For
Becoming a director isn’t just a job title. Under the Companies Act, it comes with personal legal duties, and breaching them can carry personal consequences even though the company is a separate legal entity.
Loans to directors are tightly restricted. Such loans, or even guarantees on personal loans, are severely restricted under company law, separate from the tax issues they raise. If you’re considering one, talk to your accountant in advance to make sure you follow the correct procedures.
Accuracy of filed statutory accounts is a personal responsibility. When approving annual financial statements, all directors are responsible for the accuracy of the details included, regardless of how good their secretary or accountant is.
The duty most founders don’t know about is the obligation to act when the company can’t pay its debts. If a company becomes insolvent, unable to pay debts as they fall due, directors have a positive legal duty to act in the interests of creditors, not just shareholders, from that point onward. Continuing to trade and take on new debt while insolvent, without taking appropriate advice, is exactly the kind of decision that can expose a director personally.
The Common Thread
SURE relief and R&D tax credits both depend on structuring decisions correctly from the start and keeping the kind of contemporaneous records that substantiate a claim later. Director’s duties work the other way around: they’re a standard you’re held to regardless of paperwork, and the best protection is knowing where the line sits before a difficult decision arrives, not after. If you want the fuller picture on getting this right, join our free webinar for a deeper look at the pay, tax, and compliance decisions founders face once the basics are sorted.
At Kinore, our team assesses SURE eligibility against your PAYE history, runs R&D claims end to end from qualifying activity assessment through to Revenue’s pre-filing notification deadline, and helps directors understand exactly where their personal obligations start. Senior led, with dedicated client management.
Speak with our team to book a SURE and R&D eligibility check before your next claim window closes.
