What is the eligibility criteria of the R and D Tax Incentive?
First, candidates must be a company structure.
The R and D Tax Incentive program underwent significant changes in 2020, which became effective for financial years starting on or after 1 July, 2021.
The previous 43.5 per cent refundable offset rate was replaced with a new offset rate of 18.5 per cent above the company’s tax rate, and the flat 38.5 per cent non-refundable rate was substituted with a progressive, tiered R and D intensity threshold.
This new tiered system provides increased tax offset benefits to companies that invest more heavily in R and D activities, providing a more generous reward for innovation.
To be eligible for the R and D Tax Incentive, companies must operate in Australia and engage in eligible R and D activities, such as creating new knowledge or improving existing knowledge.
What makes the R and D Tax Incentive different to other grants in Australia?
The R and D Tax Incentive program is widely used by companies in Australia and has been successful in supporting innovation and growth.
Compared to other government grants and funding options, the main benefit of the R and D Tax Incentive is that it provides a tax offset, which can provide a cash benefit for companies in a tax-loss position.
The program is also available to a wider range of companies compared to other grants and funding options.
How do I apply for the R and D Tax Incentive?
The process of applying for the R and D Tax Incentive involves submitting a claim to AusIndustry outlining your eligible R and D activities.
AusIndustry provides guidance to help companies make a successful claim, but it’s always wise to seek professional help from a registered tax agent or adviser
with experience in the R and D Tax Incentive.
When is the next R and D claim due?
Don’t wait till the last minute, companies have until 1 May to submit their claims for the current year’s R and D Tax Incentive.
And remember, this deadline is not something you can snooze.
Unless there are extenuating circumstances, there’s no extension, so get those claims in on time.
What are the benefits of working with an R and D expert?
These services include:
– Reviewing the company’s business activities to identify any eligible R and D activities.
– Reviewing internal documentation to ensure it can be used to substantiate the claim.
– Preparing R and D project documentation to provide detailed information about the activities and expenses that are being claimed.
– Assisting with the registration process by preparing and lodging the application for registration.
– Calculating eligible R and D expenditure to ensure that the claim is for the maximum amount possible.
– Preparing the ATO R and D Tax Schedule, which is the document that is sent to the ATO as part of the claim.
– Responding to requests for information from the ATO or Aus Industry, if necessary.
By working with an R and D tax expert, you are ensuring your claim is complete and accurate, maximising the value of your tax offset.