Innovative companies play a key role in our economy, with research and development (R&D) investment made by businesses being a substantial driver of growth. Consequently, the government offers a generous tax incentive to accommodate and attract highly innovative companies to invest in the economy.
The research and development tax incentive is arguably Australia’s premium government business incentive for innovation. Unfortunately, many businesses in Australia simply aren’t aware of the significant cash flow benefit they could be adding to their business by making use of the tax incentive.
Greenwich & Co are experienced in this field and we understand the intricacies of R&D tax incentives. Whether you already know you are eligible for the R&D tax incentive or need our experts to let you know whether you are eligible, we are well positioned to assist you. We can help you to understand the strategic value of R&D to your business, and help with writing and submitting all the required paperwork. We also help with all record keeping and management of any possible reviews.
The Tax Incentive offers a company whose revenue is below $20 million a 43.5 percent benefit on any of its research and development spend.
If the company is operating at a loss, the 43.5 percent benefit would be recoverable cash. As a simple example, if the organisation had $100,000 of research and development expenditure and was in a loss situation there would be a $43,500 cash injection through the tax incentive.
On the other hand, if the company reported a profit they would be entitled to an additional 15 percent tax benefit on the research and development spend. A very important point to note is that the incentive works on a financial year basis, meaning that a company can claim on their research and development expenditure for their past financial year’s operations.
It’s important to note the incentive is not only for technology companies. Any organisation that meets the definition of R & D according to AusIndustry may be eligible.
Business owners throughout Australia should be asking themselves the following question: “Are we doing something in our industry that is different from the competition and new in the market?” Some examples could be a beverage with a longer lasting shelf life, a new way of cleaning swimming pools, or perhaps a tool to assess the structural soundness of buildings. The list is endless. So, if you are innovating in your business category you may be eligible.