Research & Development (R&D) Tax Incentive
The Research & Development (R&D) Tax Incentive is a targeted, generous and easy to access entitlement program that helps businesses offset some of the costs of doing R&D.
The program aims to help more businesses do R&D and innovate. It is a broad-based entitlement program. This means that it is open to firms of all sizes in all sectors who are conducting eligible R&D.
Registration is a critical first step in accessing the R&D Tax Incentive. Companies must register their R&D activities with AusIndustry before they are able to claim the benefits of the R&D Tax Incentive. The deadline for lodging an application for registration is ten months after the end of a company's income year generally 30 April.
Making an R&D tax claim always follows three steps:
- Assess eligibility of your business and project(s)
- Total your expenses and lodge the R&D Applicaiton Form with AusIndustry within 10 months of your financial year end
- Lodge your Company Tax Return, including your R&D Tax Scedule, to claim your refund from the ATO
For example:
Spend $100,000, get back up to $45,000
Spend $1,000,000, get back up to $450,000
Spend $10,000,000, get back up to $4,500,000
Expenses that can be eligible R&D and that you can receive a tax offset on include:
- wages (internal and external contractors)
- consumables and materials
- the costs of operating computers, equipment and machinery plus much more including admin costs
There are several eligibility criteria that need to be ticked off, but if you can say yes to the following, then it is definitely worth following this up:
- must be a registered Australian Company
- must be creating a new or improved product, device, material, process or service (or acquiring new knowledge)
- must be undertaking experimental activities ie. designs, trials, testing
- must spend at least $20,000 per year
As part of our team we have R&D Consultants and R&D record keeping specialists. Contact us today to see how we can help you with all aspects of preparing your claim to AusIndustry, resolution of queries and inclusion in your taxation return.
