R&D Tax ConcessionsThe Federal Government R&D Tax Concession is an incentive program to encourage private-sector investment in research and development activities.
There have been preconceived notions that in order to qualify an innovation or a development it needs to be a world first. That is not the case. There has also been a tendency to associate R&D with white coats, and laboratories, rather than with day-to-day projects and innovations in the workplace.
For eligible activities, an accelerated tax deduction is available on R&D expenditure. You may be surprised at what you can claim - expenditure items can include salaries, overheads, sub-contracts, parts and materials, plant usage, and in certain cases amounts paid to acquire technology or know-how.
Some of the main eligibility requirements of the R&D Tax Concession are:
- Developing new or improved products, services or processes;
- Own the results of the research;
- Involves either innovation or high levels of technical risk
If you are in profit you can get an extra 25% tax deduction for a tax year, even if you have already lodged your tax return, which equates to a 7.5% after tax subsidy of your R&D costs. If you would like to work out what benefits your company can expect to receive simply plug in your figures to the R&D Tax Concession calculator.
If this sounds like you, then allow us to help you reduce your tax liability (let’s face it – we would ALL like to pay less money to the tax man!)
R&D Tax Offsets / Rebates
Is your company running at a loss? Well, within the R&D Tax Concession program, the R&D Tax Offset allows companies like yours undertaking R&D to effectively “cash-in” their existing tax losses. This aspect of the R&D Tax Concession is now providing companies who meet the relevant criteria with a significant cash return on their R&D expenditure. More money in your hand - that can only be a good thing!
There are three clear guidelines dictating who are eligible for the R&D Tax Offset. If you can answer “Yes” to these three questions, and are conducting R&D activities, you may be eligible for the Offset:
- Is your Total Group Company Turnover less than $5 million in the financial year? (This will change from 1 July 2011 to $20 million)
- Would you have spent less than $2 million on R&D in the financial year? (There will be no cap from 1 July 2011)
- Will you be in a tax loss situation for the financial year?
The R&D Tax Offset equates to a 37.5% after tax offset if you are in loss, or a start-up company with little or no sales.
If you are a start-up company with little or no sales (or you are in tax loss from the current or previous years) and you have a group turnover of less than $5 million, you can access the tax rebate, which is 30% of your total R&D spend plus the 25% concessional component. This equals to an after tax offset of 37.5% of whatever money you spend on eligible R&D. If you would like to work out what benefits your company can expect to receive simply plug in your figures to the R&D Tax Concession calculator.
Applications close 10 months after the end of your financial year and you cannot claim restrospectively – so don’t say ‘I should have’ Contact Us Now
