Name: The R&D Audit Survival Guide: Essential know-how for Irish innovators
Uploaded: 2026-05-07T12:16:16.378Z
Duration: 56 min 28 s
Description: The R&D Audit Survival Guide: Essential know-how for Irish innovators

Transcript for "The R&D Audit Survival Guide: Essential know-how for Irish innovators": Good afternoon everybody you're all very welcome to this afternoon's webinar the R and D Auddhist survival guide As you can imagine, we're just gonna kick off. We've, we've had a a large registration for this afternoon session as, as any session deal dealing with revenue audits, I'm sure would generate interest. So we might just give it another thirty, forty more seconds, give people a chance to to populate the room and get on board, and we'll we'll kick off as soon as possible. Afternoon, everybody. We'll get going soon enough. You're all very welcome. We'll, respect everybody's time and we'll get going. We'll just give it thirty more seconds maybe, and we'll we'll get going then. Okay. Right. I think we're I think we're ready to go, and we'll, we'll kick this afternoon session off. So, you're all very welcome. My name is Darragh Gaffney. I lead up, the Leighton Irish operations. And here coming at coming at you from a relatively sunny cabin at the moment. But you're all very welcome and hopefully you'll get value from this afternoon session. Some small housekeeping bits and pieces just to just to kick off Please feel free to get involved in the conversation here. I know any interaction or any conversation about how to deal with with revenue revenue commissioners is always a hot topic. So please feel free to drop stuff into the Q and A function that's, that's on the screen. In addition to that, there will be at the end of today's webinar, there will be a small pop up survey that will, that will come up when you go to log off. This is a small satisfaction survey. If you have thirty seconds to to fill it out, we'd really appreciate it, personally as well. I'd I'd love to understand what what Vex is you guys, what topics we maybe should be covering, any other value add bits and pieces that we might be able to bring out in other webinars or that can help us improve future sessions that we do. And then the last thing that I'd say is is up the top there, you can see a button that says book a meeting. So absolutely, if you want to follow-up, if you're not comfortable maybe asking, a question here in this forum or you don't want to put anything up at this stage, feel free, click the button, book a meeting, and I'd happily, connect and catch up with you, catch up with you afterwards. Right. So without much further ado, let's, let's let's get going. So in terms of, in terms of, this afternoon session, a few bits and pieces that we're that we're going to look at, you can see you can see what the agenda looks like. And rather than line walk through the agenda, from a scene set point of view, do you know, Ireland operates what's called a triple helix innovation model. Okay. And that's where you've got government, academia, and industry all involved in looking to deliver research, development and innovation within the economic ecosystem, within within Ireland. The Irish government don't really talk about the triple helix innovation model, but that's that's the model on which it was built approximately twenty, twenty five years ago. And you may have, concerns or queries about how they how they invest in different areas around that. But to be fair, the government has created a very favorable policy and tax ecosystem to incentivize research and development and what will be innovation, to come within, within Irish manufacturing, predominantly life sciences, and now wider into the wider SME and multi sectoral base, that we're starting to see these days, these days as well. And then, actually, in fact, at a at a conference that Michal Martin was speaking at, in that, he doesn't know how much more the Irish government can do to incentivize and encourage, in particular, the SME base in Ireland to actually leverage the R and D tax credit scheme. I mean, the scheme has gone in the last four years, it has gone from a rate of 25% to now 35%. So it's just increased to 35 from accounting periods commencing 01/01/2026. So it is absolutely there to be to be leveraged and utilized. In addition to that, the market and the utilization in Ireland is really immature and underutilized in terms of the R and D tax credit scheme. In other OECD jurisdictions where very similar r and d tax credit schemes exist, approximately 4% of all trading businesses leverage the scheme. In Ireland, that's 0.8%. So an absolutely massive gap there in terms of the amount of people that actually leverage the scheme. And our scheme is actually the second most favorable in the OECD. I think Portugal is the only, jurisdiction that has has a more favorable scheme. So really quickly just touch on Layton, you know yourself, there's there's four or five slides I just have to have to touch on here. Layton, in reality, we are potentially the largest global, innovation consultancy firm that you've maybe never heard of. We've got over 3,000 employees, across, across the globe. We've been around for since 1997, so more than twenty eight years, and we're active in 19 countries. And that's that's constantly, constantly growing, as you can see. In terms of our presence you can see the footprint there we absolutely a global footprint in terms of in terms of where we operate. Started started in in London and then is we are privately owned out of Paris, and you can see all the jurisdiction. So a pan global, consultancy, and we get to leverage that that structure and that weight of the global organization, as well. In terms of the pillars where we where we look to, build value, you can see there the five pillars that that sit there. In reality, today, what we're gonna talk about is that first pillar, the innovation and r and d incentives pillar. But again, just to touch on, there is other aspects there. The human capital optimization may be not as relevant within, within an Irish context, maybe more within, within German and French operations. But the first pillar there today, the innovation and r and d incentives, is the primary piece that we'll we'll talk about, today. And then, again, just a very good overview, and nobody needs to try and write any of this down or take a screenshot. You'll you'll get a copy of the, of of the slides towards the end but you can see there from the different kind of incentives that exist across different jurisdictions and different countries that we have a footprint in you can see the wide array of incentives that exist on a global basis depending on what, what those five pillars, that we focus on at the moment. So and and then just to talk about that, actually, just recently, about six months ago, we launched a brand new VAT compliance hub. You can see it covers all the different, six pillars of, of VAT services. And that's for any of you guys that may be either in Ireland and have expanded, and are opening offices in other jurisdictions. Or indeed if you're, if you're a part of a larger multinational group, depending on where, on where that VAT services and the different, compliance aspects that you need, we have on the ground local VAT support in, in a lot of those jurisdictions that we spoke about, as well. And then, again, just to touch on the fact that we are, you know, just some of the some of the large businesses and the large companies that we deal with, some household names, some non household names, but that you'd recognize. And to give us a specific, Irish slant, Layton, the Irish office, has been operating for approximately the last three and a half years. I came into the business just over a year ago, to build out a brand new office. We now have nine people on the ground in Ireland. I'm looking to scale that to over 20, in the in the next six to nine months as well. And, actually, as it happens, Leighton were actually present in Ireland, up until 2013 when Deloitte acquired the Irish, the Irish division of the business. And then after a ten year non compete, Leighton reentered the Irish market, as I said, three and a half years ago. And we've had absolutely massive success in terms of, in terms of leveraging, different sectors within the Irish market to the point that we've now got a client base of just over 250 clients in Ireland. So, phenomenal growth demonstrated across the team to to generate a client base, like that in the last three and a half years. Okay. So just as we as we kick off here and we start getting into getting into some of the some of the meat of of today's session. And again, I've left plenty of time at the end of the session for q and a. So, so feel free to get any any q and a into the into the chat or the q and a section as as you get going. And, Nazara might ask you to to launch that poll, in the background there, as well if that's if that's okay. So first off, I'm just gonna the poll you can see just says, what concerns have you previously had, when deciding to make an r and d tax credit claim? I have made the assumption that the very large majority of people that are on the call here today, are existing r and d tax claimers, just in terms of, if it's a scheme that you're not necessarily too familiar with or that you don't already leverage. I made the assumption that you may not jump onto what a revenue compliant claim claim might look like or what an audit potentially looks like. So just wanted to, just wanted to do that. But you can see there is a lack of knowledge awareness of the scheme. You don't want to raise your head above the parapet in terms of revenue. We don't do r and d or actually you feel like that actually deduces it more to squeeze. It'll be too much hassle internally or take up too much bandwidth, to actually, to actually take that on. So so please feel free to vote there, and, and I'd be I'd be interested to see see what, what the results of that will start to look like. So what you can see here, again, compliance is is where Latent operates. We look to deliver robust service that is compliance led. Okay? You can see there, you don't need me to line walk through the different bullet points, but absolutely, we we take our compliance and that robustness, extremely seriously. We have an internal QA team that is separate to other units within delivery units within the business that actually sends checks and and, and qualifies all the work that we do. Full inquiry defense, or full coverage of your revenue for your audit window is, is is covered as part of all our commercial commercial terms, with our clients. And you can see that we have a a very low inquiry rate, which is absolutely bolstered by that, by that QA and compliance led approach that we take, in terms of, in in terms of the service that we deliver. And where we differentiate is the fact that we have technical experts that have worked in industry within the business to work to work on your claim. So, so yeah. So, I'm not too sure whether how the poll is looking there at the moment. Nazar, are you able to publish that? Fantastic. Brilliant. So concerns. Well, okay. Yeah. So, a very large chunk of you. Two thirds of you are talking about lack of knowledge, awareness of the scheme. Don't want to raise awareness with revenue. Don't do r and d. Okay. Yeah. We might talk about that in a few in a few minutes. I'm actually glad to see that actually too much hassle not worth it is is is lower down the pecking order, but, again, can be, can be can be significant. So at this point, I didn't want this session to be a pure, just kind of one to many approach. And, at this point, I'm gonna bring in, Dania, who's one of our business development team, working, working within the Irish market and just have real quick conversation around, around the challenges and the conversations and and some of the areas that, Daniel, you come up with, when you're clients or prospective clients that are looking to engage with with with with yourself. So I might start with, where are the where are generally the the the blockages or the concerns that, that that you come up against on a, on a on a daily basis? Yeah. I mean, there's kind of three, I suppose, main things that I would come across, and I'm kinda glad a couple of them were actually mentioned in the poll and a few people react to them as well. So one of the big ones that I come across quite a lot is people thinking that they don't do R and D. A lot of the time the pushback is oh well like we're construction or maybe we're engineering, we're not doing research and development because because people tend to straightaway think of science and lab coats when you hear R and D. However, that is absolutely not the case. As we're well aware of now, it is open to any industry that is partaking in activities that Revenue themselves guarantees as or within their I suppose criteria is R and D. With that I would get rid of the idea of Science Lab Coasts. As I said, if you are doing anything that is innovative, new to you, you're expanding on maybe projects, processes you already have in place, anything that is just new for you as well, I'd absolutely recommend looking into the scheme. As I said, it's not just for one or two industries. As we know now, it's open to anybody who is kind of doing R and D within the eyes of revenue. Sure. And I think I I think that alignment actually with the first category definition is, is, is a key part and that actually it it's not the traditional academic kind of blue sky new to the world r and d. It can be r and d that is new to your business but is inaccessible from a competitor point of view. Yeah. Absolutely. Because I've heard that a couple of times as well where people are like, well, look. It's kind of you know, I know a couple of people are trying this or attempting this as well, and you're like, yep. But it's new to you. You know, they're not gonna call you up, and they're not gonna give you the solution. You still have to figure it out on your own, and that's exactly what we're kind of looking for for a revenue standpoint. Another thing I come across quite often would be I don't think it's worth my time. People not understanding that well, suppose the purpose of Layton and the purpose of us is to do all the heavy lifting and take that away from you. So kind of tying back into the, well, we don't do R and D or we're not really sure what is R and D. Our main job is to highlight what the R and D is for you. Again, absolutely, we'll sit down, run through all your projects, but it won't take you hours and hours. I hear people saying, oh, you know, we have so much work to do internally. As I said earlier, our entire purpose is to allow you to continue doing your day to day activities while we look after the r and d claim for you as well. So yeah. And I and I think that was it was I think that that was one area, Danny, I know when when I first came across Leighton that that I was I was really happy about. I was previously an r and d director in a in a previous life, had a big four, provider of r and d tax credit services. But it was basically they marked our homework, so I had to do all the heavy lifting in in in in house. And then, you know, our big four provider kind of run the rule over that, whereas we we flipped that on its head. Yeah. Completely. And, again, it's with our industry specific technical consultants as well is where it makes it even easier. You know, you don't have to translate your work into layman's terms. Let's say they know exactly what you're talking about. They live and breathe your industry. So it's more of kind of a sit down chat and going through, okay, this qualifies, this doesn't. And even that what might seem as quite a small aspect saves everybody so much time in the actual process itself. Fantastic. Yeah. I'd say the other major thing and this is gonna be the biggest one I'd say, is a fear of revenue. People are concerned and again I guess it does tie back into the fear that we're not doing R and D. So if we put something through like this is revenue going to come back and how is that going to affect us. Again one of the main points of Layton is to not only highlight the R and D complete the claim but ensure maximum compliance which is why again we do have as part of our service the inquiry defense. Because of that we've never put anything through. That itself would not, that we cannot defend 100%. Again revenue is year on year increasingly claimable rate. They want more people to claim, they realize it's an entirely underutilized scheme itself. They are encouraging more people to claim and again, if what you're doing is legit, it's R and D and we can back it up in the way that we do with all of our claims, then there really shouldn't be any kind of fear of putting your legit r and d work through. Okay. Fantastic. Daniel, thank you very much for for jumping on just to, I thought it'd be no harm that, the the audience heard a different voice rather than rather than just my own. And you're you're at the cold face, a lot more than I am, these guys, in terms of these fears and concerns that, that come up on a daily basis. Perfect. Cheers, Sarah. Bye bye. Thanks so much. Right. Let's get into the let's get into the the the real meat of, of today's session then. And let's start kicking off and and talking about well, what does a potential revenue, inquiry or potential audit actually look like? Okay. I'm starting to starting to to to look at that. Again, I think moving on with that, effectively, looking at the tax and duty manual and and the way these issues, generally, a revenue intervention comes across two different levels. Okay? So the first one is level one. Okay? And you can see there, it it's generally it's it's issued through through a letter. You either get the letter in the post or through my inquiries. And you can see that from a code of practice point of view, it's aimed at supporting, you guys that are claiming, reminding of your obligations, and then giving you the opportunity to correct errors. Okay? And I'll show you an example of a level one, letter, in a minute. Generally, a level one is is done, completely remotely, or through your accountant or with the revenue caseworker through my inquiries, and it's a back and forward, generally just a request for information. If anybody hasn't been part of the actual r and d tax credit filing process, basically, what happens is is you just upload your r and d tax claim figures as part of your c t one filing. So the level one inquiry letter from revenue, nothing to be afraid of, nothing to be feared. It is really just a case of, don't tell me you're doing r and d. Now show me that you're doing r and d. And it will generally ask for, do you know, there's three questions within an r and d tax credit claim that you obviously need to, need to resolve. One is, the technological or scientific uncertainty that the that the work you were doing was looking to solve. The second one is the advancement above what's called the state of the art that you were looking to achieve. And then the third one is that it was done in a systematic manner. And there's two others as well, but but I wouldn't they're they're financial and technical or financial in nature, and I wouldn't worry about that for the moment. If you can then answer with the r and d report technical report aligned with the suggested file out in the appendix of the tax and duty manual, which, again, I'll show you later, and then just actually go, well, project one, the technological uncertainty we look to resolve was x. The advancement we made beyond the state of the art was y. We use a systematic manner using, you know, I don't know, a stage gate process or with a weekly cadence or with project management system, you're good to go. Okay? And you just 95% of all inquiries get absolutely just dealt with at level one. Level two then is is then when maybe, maybe those answers haven't been, resolved with the revenue caseworker to their satisfaction. And we often see actually, the the times where we end up getting involved with level two is actually often when the accountant has tried to deal with the level one inquiry by themselves. And, unfortunately, what they may have just done is sent, you know, the forty, fifty page or in the technical report on to the revenue caseworker, but that does not directly answer the checkbox questions that they have. And a level two then is a bit more in-depth, and it may involve actually the involvement of an external technical expert. But I'll I'll come to that, in in in a minute now as sorry. The field click might One, there we go. So you can see then if we if we break it down in terms of level one, level two, level three, again, what that code of practice looks like. As I said, the level one, it's the support compliance. This is where you have, the opportunity to make a self correction if necessary as well as an unprompted disclosure, and it's it's it's self led, basically. So it's self accredited. The level two then part is the part where I said the caseworker will get involved. You more than likely will have an external technical expert, if you were not able to to answer those technical questions. And there may be at the end of that level two point, an adjustment in terms of your your only tax credit claim. And then level three is is when it, goes past level two and it's full, it's full on. There is no opportunity for qualifying disclosure and there's a strong chance that unless you as a company decide to drop it, that it may be heading towards the the tax appeals commission if you vehemently disagree with the, with the, with the decision that Revenue have made on your claim one way or another. Again, what does what does a letter look like? So we've got a sample letter there in terms of what a level one notification or a level one inquiry, looks like. There's there's a few different bits and pieces there that you can you can take a look at again. You can look at it more in detail afterwards. But, absolutely, I go back to what I said. Generally, level one is don't tell me you're doing r and d. Show me you're doing r and d. Excuse me. So you would generally send a cover letter which outlines project one and the three bullet points that I was talking to you about, the uncertainty piece, the advancement piece, and the systematic nature, irrespective of whether that stuff is in the 40 page or the deeper r and d technical report or not. Level two then is is when it starts getting into into more of the detail. And in reality, they can ask anything here in terms of, either technical or financial data. More often than not, we're seeing that actually it's a deeper dive into the into the technical side of your r and d tax credit claim to make sure that actually the work that the company is doing actually qualifies alongside the revenue definition within the legislation. So as I referenced earlier, it's, it's heavily built on what's called the Frascati definition. Both the Canadian and The UK schemes are built on, on very similar definitions, in in terms of that. Some may feel it's a bit rigid, but one way or another, that's that's what the legislation says. And that's what the external experts are brought into, are brought into look at in terms of in terms of this this process. And that can often be done, that can often be done on-site, or over Teams one way or another. But we would generally encourage our clients if it ever goes to a level two, to do that on-site, especially if there's a good aspect of of show and tell to the actual innovative, work that's being done within your business, one way or another. Okay. Some overview then, some bits and pieces that we're seeing out there at the moment. There absolutely is, and and this is not me trying to take a fear based approach or anything like that, but this is just what we're seeing in the, in the ecosystem at the moment. There absolutely is an increased volume in level one and level two interventions. I would say that we're in a period of correction, I think, is probably the best way to put it at the moment. I think post COVID when there was a massive amount of work for revenue to do in terms of unwinding the the previous, salary support support support schemes as well as the VAT warehousing that went on during COVID, it meant that actually revenue didn't have the bandwidth to be looking at r and d tax credit claims, as in as much detail. I think as that VAT warehousing piece has been unwound, you're now seeing the focus shift on to r and d tax credit claims. Again, absolutely nothing to be, to be fearful of, you know, once you have stuff ready and prepped, ready to go. In those level one, we are seeing a greater number of the r and d reports being requested, both for first time and recurring claimants. If you look at the data, I think so the most recent data we have is for 2023. There was in '22, there was just over 1,600 companies claimed the r and d tax credits to the tune of about 1,150,000,000. That increased by approximately 180 companies and went up to just above just above 1,800 companies claiming in 2023. A significant number of those companies that claimed between 'twenty two and 'twenty three were new claimants and also were SMEs as well. So So it's now sitting or back in '23, it was sitting at about 1,400,000,000. And the government has stated their ambition that by 2030, the value of the R and D tax credit claim being leveraged should be 3,000,000,000. So that tells you where where policy direction is going and where policy ambition is at for this. You can see there is an increased focus from revenue on employee qualifications without necessarily taking into consideration experience. Again, there is a suggested file layout or or a template that we use as well that demonstrates the the employees that are involved within an R and D tax credit project qualifying project. Again, you can put in the qualifications. But I'd also say if you're filling that out, to make sure that actually, you write a small two or three line bio about their experience, especially if there's somebody that maybe does not have that, you know, level seven, eight, nine, ten kind of qualification, around that. And then you can see then there is absolutely an increased request for the supporting evidence for allocation of staffing costs and time, actually. So time is is, how are you allocating, do you know, Dara Gaffney's, time towards what was an r and d qualifying activity and who signed off on it, internally as well. So time sheets are the easiest way to do that. But then we see a lot of people using task management platforms as well, the likes of Jira or different systems of that, of that ilk where, you know, the task completion, can be can be signed off, one way or another, and a time allocation can be can be put towards that, as well. And this is the this is the that I alluded to earlier. So you can see at the back, it's appendix three at the back of the tax and duty manual, the r and d tax creditors tax and duty manual. And this gives you kind of all the all the questions, that we often see coming out in in the level one, inquiry letter at the moment. So so by all means, jump on, jump on to the revenue website, take a look at that document And appendix three, I think I think it's about three pages long, three and a half pages long. There's 27 questions in there that need to be answered in terms of any robust R and D tax credit claim one way or another. And then talking about, talking about that level two intervention and what what that looks like from a technical expert getting involved. So you can see there that if at level one, the caseworker is not happy, the technical expert will be will be appointed. The biggest take home that I'd ask you to take from this slide, if not today's session at all, is you have agency here. And and please don't forget that. Okay? Just because revenue have said jump does not mean you automatically need to go into a how high, mindset. Okay? Revenue will identify a technical expert that they may want to bring into the business. However, you have the opportunity, to actually veto that expert and say, no. I believe there's maybe a conflict of interest there, or I believe their background or their experience is not aligned with with our industry or our business, and I don't feel they're the they're the correct person. Now what I've written here, and this is not in the legislation, and it's not a hard and fast rule, but the general accepted rule of thumb is that you have two vetoes. So you have two opportunities to say no to a technical expert and that you really need to be in a position to accept the third one, one way or another. In addition, actually, I I meant to say prior to a technical expert being appointed, you may actually give the revenue caseworker names of people that you do not want to act as a technical expert as well. So you can also get ahead of the curve just in case there's a preexisting relationship there with a with an academic or, or some kind of a technical adjudicator that, that that you don't want involved in your business. These technical experts, they are by and large, from an academic background, albeit, at that interface of industry academia. So but there there absolutely is an aspect of managing that external expert. And this is why I say ask to organize a briefing call ahead of the actual formal meeting where the technical expert questions, question you questions you on your claim, understand their background, understand where they're coming from, because actually, managing that technical expert on the caseworker is as important as actually getting your getting your case across as well and understanding. Because if somebody comes from an academic background, an academic r and d background, they may not you may think that it's obvious to them what qualifies under the legislation, but it's not always the case. Okay. Again, going back to the agency piece here, clearly outline what is on the agenda and what is not on the agenda. And if you feel any topic of discussion is veering off the agenda, for that site meeting, don't be afraid to say it, you know, in a gentle manner and ask the caseworker to bring it back on track. And then one thing, and I don't know whether I need to say this or not, but it's definitely in in a previous life when I worked, when I worked for the industry research development group, there was definitely a perception out there that technical experts, received a bonus or a percentage of any of any any clawback of r and d tax credit value that revenue achieved as a result. They absolutely do not. They get a fixed daily rate, in terms of the, in terms of the engagement. I can't remember completely off top of my head. I think it's somewhere I think it's about 700 or €750 a day, is what they get. And it is a set. You know, every engagement takes three to four days. That's it. No bonus. No additional payment. No nothing else. So just to just to say that out loud. Okay. We are heading towards the end. So please, if there's if there's any q and a or any bits and pieces you want to get in, get into the chat, please please get them in, and and we'll start to address them, near the end as well. So the last part I wanted to say is is that's the that's the order piece. And now how do you get yourself prepped before that revenue letter ever actually lands into your into your inbox one way or another? So and that is about building, I suppose, as quasi or as semi real time a process and collation of data as possible. And we we quite often see that this is a retrospective exercise that, the or any tax credit claim is compiled around June, July, August for a September filing. And that means the data is potentially eighteen months old at that stage. Not only that the people have probably have potentially left your business. And so where that data sits and where that legacy knowledge sits may already be gone out of your business. So we always encourage that actually, you should be compiling the activity and the cost allocated in as real time as possible. And that's that that's where we bring bring that value. And And you can do that on either a monthly or a quarterly basis. We'd often find that the likes of CFOs and FDs, excuse me, in particular like that approach because that then gives them forecast of visibility of what the r and d tax credit claim will look like for the following year, and it helps a lot better in terms of from a cash flow management point of view as well. Again, you can say keeping track of it all. There's there's two sides of it. There's the technical perspective you can see there. You know, what does the project duration look like? What the technological baseline was at the start of the project? I don't know if people on the call whether you use the likes of project identification documents before, before a project commences or kicks off. Maybe it's more informal than that, but this is where you'd be capturing the likes of the technological baseline and also some of the literature review piece that may be within within your business. And then again, how can you get to the point of of delivering live project tracking as well as capturing any of those technical design and process iteration pieces that may qualify as well? And look, I mean, we we have software tools that we offer to our clients as part of our standard offering to be able to enable that live project tracking, as well and give that kind of dashboarded visibility of where your already tax credit claim is sitting at at any given time one way or another. From a financial perspective, track, track, track, to be honest, is is is is all I can say here. Again, whether you use time sheets, you know, the likes of task management systems, cost project codes, whatever that may be, project management systems, agile systems, whatever it may be. You know, lean on what you already have within your business to actually manage these projects that you're doing. Again, what you report, I'm I'm assuming everybody is is well offay with this, but you've got obviously labor, materials, consumables, and there's an aspect around plant machinery and CapEx, in there as well. If you're not tracking, obviously, revenue wants you to be able to demonstrate that best in class methodology is contemporaneous collection and tracking of qualifying tasks and qualifying expenditure, as well. And then again, if anyone wants to ask about the pre notification, ultimately, if you have not previously made an r and d tax credit claim or your previous r and d tax credit claim was three accounting periods or more, you need to pre notify revenue of your intention to make a claim 90 before your c t one filing. Okay? So if you're a December year end and you're gonna file at the September this year for 25, you've got about a month and a half to to pre notify revenue. It's a two page again, it's a two page document. It's in the tax and duty manual, that you it's nothing overly onerous to be able to do, but you need to you need to do that. The second thing to look at is is you need to pre notify any subcontractors of their, of their ability, sorry, to claim your payment in their or in the tax credit claim. So revenue wants to see this to prevent double dipping in terms of, in terms of the the potential process, one way or another. You do need to be a little bit careful. You need to notify them before the invoice is actually paid. But, ultimately, we'd say put it into your initial contract, one way or another, unless your contractor says they've already built the r and d tax credit claim into into the cost model that they've already provided you one way or another. So, look, that's it from me, for, for this afternoon. I think I've probably been been talking long enough. I'll wrap up with a few thank yous in a minute. But but please, any q and a we get in, I see one or two in there. So so I'll I'll absolutely address them them on any q and a that needs to come in. Please get it in or feel free to to book a follow-up slot one one way or another. So you've probably all seen, in the chat already, or potentially that, absolutely, the recording of this and the slides will be shared. So we'll we'll do that after the call. Just a reminder again at the end of this, the satisfaction survey pop up. I would love you to if you could take thirty seconds to to do that, we'd be delighted. And let's kick into some, bit of q and a there. Okay. So when a level one inquiry is received, is it limited to your r and d claim, or did you review your CT return in full? So really good question. And and this is often and it addresses one of the one of the concerns we absolutely get asked, which is, I've been revenue compliant for twenty five years. Revenue have never raised an eyebrow at me. This is going to act as a beachhead into the rest of my business. It absolutely will not. Okay? And we have never seen, that leakage, of where revenue come in. They do. They come in, and they only ask about your r and d tax credit claim. And we have never seen an example where that has then leaked into other aspects of your business, one way or another. The only area I've ever seen us widen is if, is if an is made of that part of your of of other aspects of your business as part of the caseworker coming on-site. But in terms of r and d tax credit claim, no. I've never seen it used by revenue or happening that it acts as that entry point into other aspects of your business. So hopefully, hopefully, that answers that question there, but feel free to stick in if if if if it hasn't, David. Are signed off physical time sheets required by revenue as evidence of labor in cost incurred on r and d projects? So, again, another really good question. Physical time sheets, no. Okay. So there is a suggested time sheet layout again at the back of the tax and duty manual. That can be really onerous depending on depending on your business. So you need some kind of a demonstration or allocation of time towards r and d projects, one way or another, that are signed off by a supervisor or a senior manager. If you're not going to use paper time sheets, well, then what are you gonna use? You know? And, again, this is where I was saying, if you already have a task tracking system like Jira, well, then quite well, not quite often. You can use those reports to actually demonstrate be used as evidence of the labor costs incurred on those qualifying R and D projects, especially if you have a cost code towards what that is. The other part is is you may have you may have a project that is not a pure r and d focused or r and d qualifying project, that only maybe the front end work carried out at the start of the project is actually qualifies as r and d before it comes commercial, commercially focused, activity. And it's okay at that point that actually you can say, well, for the first month of that project, Dara spent 60% of his time on qualifying r and d activity, and my boss signs that off as part of, as part of a time sheet. We have templated, we have templated, documents that we can use that can that can actually do that. Yes. The gold standard is that that is done, on a weekly or a monthly basis. However, it can easily be backed up with that task management stuff and can retrospectively be completed, one way or another. So hopefully hopefully, that answers that question. Okay. Okay. I can't see anything, anything else coming in, in the chat at the moment, in in terms of that. Again, look, we're just coming up on quarter to one. Hopefully, I might, give you all of another question coming in. What are the most common reasons software or indeed claims are selected for audit? Again, a good question. I think with software, it is where the the technological advancement is not clearly demonstrated. Okay? So I wouldn't say that they get selected, automatically. But I would say the areas that get scrutinized with a software focused r and d claim is is absolutely that, the activity done was actually r and d qualifying, not just normal business process, based iterative changes within your business. And the other two areas, I'd I'd say, is is rent. So, they absolutely look at rent. And the definition here is the allocation of on a pro rata basis of a cost that is wholly and exclusively involved in the r and d activity within your business. So that's where quite often, if you've got a wet lab with guys in in in lab coats and you're renting a wet lab, it's really easy to go, well, it's a lab. You know? I mean, you know, 90% of it is used for r and d. We're allocating 90% of the rental costs. If you've got 10 guys sitting in an office on laptops, that's a lot harder to to actually justify. So so the rent piece is absolutely a cost that that we'd see revenue sometimes query and just look to see whether that's been included or not, and they will absolutely ask for justification on that. And then the other one, I suppose, extending that similar mentality is that piece around cloud computing costs. So so absolutely a business, a software business may have a significant server access build that they need on an annual basis. And again, how do you on a pro rata basis, say how much of that, server access was actually allocated towards an r and d qualifying activity? That sounds, you know, it sounds onerous. It sounds very, you know, legal and legislative, and and very tax compliant. The reality is is is is it's not, but but can be actually allocated, fairly easy with a with a fairly simply templated, response. And then what separates a strong software or a decline from one revenue challenges quickly? I would say it is it is the depth of your technical report, Milena. I would say, and that the technical report is not just written, like an in house technical report would be written, like maybe a quarterly or an end of project report, but that the report is actually written in alignment with the 27 questions that is at the back of the tax and duty In particular, those technical questions first and foremost that revenue asks for. What field of science is it in? How does align against technological uncertainty? Where is the advancement? What was the current state of the art? And why was it not obvious to an expert in the field how to actually do what you did? And then the last part, I'd say, specific to software is, how you demonstrate that it is not purely plug and play of off the shelf software, existing software solutions, but that actually the integration of off the shelf software solutions is viable. But you need to demonstrate why it wasn't, where the r and d was in that integration, in that integration piece. So so hopefully hopefully that that addresses those, Elena. I'll give us, I might give us twenty more seconds just in case just in case every time I've every time I've gone to try and wrap the session up, another another question, has come in. And thank you very much, by the way, for for putting questions in. Those of you that did put questions in, You know yourself when when you give these webinars, sometimes you never know whether whether you're just talking into the ether, or whether people are are are listening and and engaged. Okay. So does every company receive a level one or level two inquiry? Can you claim professional fee paid to prepare an r and d tax credit? Yeah. Good questions. So, no. Every company does not receive apologies. Thanks, David. So every company does not receive a level one or level two inquiry letter. I would say, at the moment, from a level one point of view, we're seeing, we're seeing about of somewhere between a 68%, level one inquiry rate at the moment, in in terms of, in terms of what what we can see. And in reality, it is rare that we would see revenue go straight from no inquiry to a level two inquiry. Okay, so it will normally be that stepwise stepwise process to go from, level one, they're not happy, and then moves to level two. Now having said that, we have seen one where it went from zero to level two. However, our, our inclination is that the company went from never claiming r and d tax credits to claiming an absolutely massive volume of r and d tax credits. Now there's nothing wrong with that, but you need to make sure that if you're going to do that, that obviously an eye an eyebrow may be raised and that you need to be ready to actually defend that in as robust, robust, matter as possible. The second part then, can you claim professional fee paid to prepare an r and d tax credit? No is the short answer, because, that was not part of the technical execution of the r and d qualifying activity within your business. So there's no point trying to explain it anymore one way or another, but no. You can you can claim external consultancy fees and external subcontract fees once they are involved in the technical delivery of the r and d tax credit claim, one one way or another. And then the biggest, so what are the biggest mistakes companies make when describing technical uncertainty in software claims? I would say, they actually you need to remember who your audience is, Elena. Your audience is, first and foremost, a tax compliance case worker in the revenue commissioner's office. So you need to distill it down into language that in one sentence addresses what the technical uncertainty being addressed is. So rather than they're talking to another software based peer who is an expert within their industry, you nearly need to frame it as to how you may describe what you're doing to your significant other at home one way or another. Or if you were trying to explain it to one of your teenage children, you know, if if you have them. So, yeah, distill it down into one to two sentences that actually just is impactful and says the technological uncertainty we look to address was x. That's it. Do not go off on a big diatribe, one way or another. So that that's what I'd say there. Next question. Is it better to separate software and hardware claims? No. Not. I I wouldn't necessarily say so, Derek, to be honest. I I I you could, I mean, it depends on how you want to prepare the report potentially. You could prepare the report across two different teams, a software team and a hardware team. But, I mean, ultimately, if the software and hardware are integral, are both aspects of the the project that you are working on, no. Absolutely not. I'd I'd say, I I'd say combine them, you know, one one way or another. So, cool. Okay. Apologies. My apologies. I've just seen, the q and a didn't pop up for me. So I'm just quickly taking a look at the q and a to make, to make sure I've actually, I've actually addressed everybody's, everybody's queries. And I think I have, at this stage. Okay. Look. I think, without much further ado, I think we'll wrap up there, one way or another. Again, we've done all our housekeeping housekeeping. We've done all our bits and pieces. Again, anything you need, feel free. Connect with myself on LinkedIn. Connect with Adania. Use the use the button above. Very happy. We'll never push any kind of sales based approach on you. I'm very happy just to just to connect and educate, and hopefully bring value, one way or another. So, so I think with that, thank you very much for your attendance. Thank you very much to Adania for for joining me for a bit of today's session, and also to, to the to the team, internally for helping me support this and set that up. And, yeah, hopefully, I'll come across some of you, some of you in the RD and I ecosystem across Ireland, in the coming time. Thanks very much.