Tax Incentive Applications
Do you know if you are eligible for R&D Tax Incentive?
Initiatives by the Australian Government to encourage innovation in Australia have been around since at least 1985. There have been many changes over the years as the Government has made many changes to how the various schemes have been administered.
The current R&D Tax Incentive (RDTI) scheme dates from 2012, and comes in two parts, depending on whether the company making the R&D concession claim has a turnover of less than or more than $20 million dollars.
Companies with an annual turnover of less than $20 million receive a refundable tax offset of 43.5 per cent. If the company is in a loss-making situation, then the Government will pay you the 43.5%. The minimum R&D spend for the R&D Tax Incentive scheme is $20,000, so if you don’t make a profit, the Government will pay you $8,700 – in cash.
Companies with an annual turnover of $20 million or more receive a tax offset of 38.5 per cent, but unlike the smaller companies, cannot receive cash if they are not making a profit.
Ensuring that you are eligible for R&D Tax Incentive
Whilst it is certainly possible for companies to submit their own RDTI applications to AusIndustry, it is a bit like filing your own tax return – you really are better off getting a specialist to do it for you. AusIndustry have a number of guidelines to help companies understand what they can claim but interpreting these guidelines can be daunting, especially for smaller companies. Consequently, many RDTI applicants make mistakes in the scope of their applications.
Getting advice on how to draft your RDTI application is difficult to find. How you present your RDTI application matters and can make a big difference to the success or otherwise of your application. AusIndustry is trying to decide if you have eligible R&D. They are not trying to understand your R&D – just trying to decide if it is compliant with the requirements of the RDTI scheme. Describing your R&D in a way that makes it easier to understand is going to make it easier for AusIndustry to confirm the eligibility of your R&D.
Finding an R&D Tax Incentive Specialist
Find a R&D tax consultant with strong STEM (Science, Technology, Engineering, Math) expertise who will take the time to understand your R&D, as well as having a sound financial knowledge of the R&D Tax Incentive scheme. This should result in a much more coherent and understandable application.
If you are undertaking R&D, you really should investigate whether your R&D is eligible for R&D Tax Incentive. It is there to be used, and the Government really does want it to be used. More information can be found on the AusIndustry webpage.
Despite the difficulties in achieving a good and eligible R&D Tax Incentive application, the R&D Tax Incentive scheme remains a valuable source of R&D funding, especially for small to medium sized companies.
Tech Abstract has 10 years of successful R&D Tax Incentive applications and has strong STEM expertise. We take the time to understand your R&D, and have the skills needed to clearly explain your R&D in terms that make it much easier for AusIndustry to assess.