Business grants

Enterprise Ireland and LEO grants alongside the R&D credit

By McManus McCabe Chartered Accountants

The R&D tax credit is not the only support available to an Irish business developing new products, processes or markets. Alongside it sits a landscape of grants from Enterprise Ireland and the Local Enterprise Offices, and the two forms of support can often work together. The problem for most business owners is not a shortage of funding; it is knowing which body they should be talking to, what each offers, and how a grant sits with the tax credit. Get that right and you draw on more than one source; get it wrong and you leave support on the table.

This guide maps the main funding routes, who each suits, and how grants and the R&D credit interact, so you can see the whole picture rather than just the piece in front of you.

Two different doors: LEO and Enterprise Ireland

The first thing to get right is which body you should approach, because they serve different businesses. Local Enterprise Offices are the first stop for micro and small businesses, generally those with up to ten employees, and are locally based and accessible. Enterprise Ireland works with larger, growth-focused companies, particularly those that are exporting or have the ambition to. Approaching the wrong one wastes time; matching your size and stage to the right door is half the battle.

What the Local Enterprise Offices offer

For a small or early-stage business, the LEO is often the most practical source of support, offering a mix of financial and non-financial help:

• 1
  Feasibility grants to research and test the viability of a new product, service or market.
• 2
  Priming grants for newly established businesses in their first period of trading.
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  Business expansion grants to help small businesses that are growing.
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  Training, mentoring and programmes such as management development, which are valuable and often overlooked.

LEO supports are generally aimed at businesses that can demonstrate potential and, for some grants, the capacity to create employment or to export in time. Because they are locally delivered, they are approachable for owners who would find a national agency daunting.

What Enterprise Ireland offers

Enterprise Ireland works with companies that have grown beyond the micro stage and have real growth or export ambition. Its supports are broader and larger in scale, and include research and development funding to help companies innovate, expansion and capability funding, and significant support for internationalisation and entering new markets. For a company whose plans have outgrown what a LEO can offer, Enterprise Ireland is the route, and a business often graduates from LEO support to Enterprise Ireland as it grows.

How grants and the R&D credit interact

This is the point that catches people out, and it is where coordination matters. Grants and the R&D tax credit are separate supports, and a company can benefit from both, but they are not entirely independent when they fund the same thing:

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  Where a grant funds specific R&D expenditure, that grant-funded portion generally cannot also be claimed for the R&D tax credit, because you cannot receive two supports for the same euro of spend.
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  Expenditure not covered by the grant may still qualify for the credit.
• 3
  The interaction needs to be planned, so the mix of grant and credit is optimised across the total R&D spend rather than one undermining the other.

Seeing the whole funding picture

Most businesses look at one support at a time and miss how the pieces fit. Mapping your size and stage to the right agency, identifying the grants you are eligible for, and coordinating them with the R&D tax credit gives you the full picture and the strongest overall position. McManus McCabe, chartered accountants and business advisors, can help you navigate the funding landscape and coordinate grants with the credit. See our business advisory service, and talk to us about the supports open to your business.

Frequently asked questions

• What is the difference between LEO and Enterprise Ireland grants?

  Local Enterprise Offices support micro and small businesses, generally up to ten employees, with grants such as feasibility, priming and expansion, plus training and mentoring. Enterprise Ireland supports larger, growth-oriented and exporting companies with broader funding including R&D and internationalisation. Your size, stage and ambition decide which one you approach.
• Can I get a grant and the R&D tax credit at the same time?

  You can benefit from both, but not on the same euro of expenditure. Where a grant funds specific R&D spend, that grant-funded portion generally cannot also be claimed for the credit, though expenditure not covered by the grant may still qualify. The two need to be coordinated so they complement rather than clash.
• Which grants can a small business in Ireland apply for?

  Small and micro businesses typically start with their Local Enterprise Office, which offers feasibility grants, priming grants for new businesses, business expansion grants, and training and mentoring. As a business grows beyond the micro stage, Enterprise Ireland supports become relevant.
• Do grants reduce my R&D tax credit claim?

  They can, where they fund the same expenditure. You cannot receive two supports for the same spend, so grant-funded R&D expenditure is generally excluded from the credit, while non-grant-funded qualifying expenditure remains claimable. Planning the mix across your total R&D spend is what optimises the combined support.

Useful resource

For small-business grants and supports, see the Local Enterprise Office network.