April 2011
This months topics:
- How to get paid to innovate
How to get paid to innovate
There is a government incentive program for R&D work carried out by business. This is administered through Ausindustry but your claim is made through your tax return. To make a claim you need to be registered prior to lodging your tax return. Once your claim is submitted to Ausindustry, they will provide you with a claim number and this is included in your tax return. Your application to Ausindustry must be made by no later than 10 months after the end of the financial year. So, assuming you have a 30 June balance date, you need to have submitted your application by 30 April. This only gives you limited time to act.
The two main concessions currently are:
• 125% R&D Tax Concession - This is a general concession allowing eligible companies to deduct 125% of eligible R&D expenditure incurred on eligible Australian-owned R&D activities in their annual tax returns. The basic eligibility requirements must be satisfied to access this tax concession.
• R&D Tax Offset - This tax offset allows small companies who are in a tax loss to cash out their tax concession entitlements. The tax offset is paid at the rate of 30 cents for each dollar of deduction that would have otherwise been claimable. For early stage companies (or where you are in a tax loss position), this can be a valuable boost to your cash flow. You can cash-out the tax losses that have been incurred in your R&D work.
To be eligible for the R&D tax concession, you must meet all of the eligibility requirements. It is important that you have assessed your eligibility for a specific claim. The basic requirements to be satisfied to access the R&D tax concessions are:
1) The entity must be a company incorporated in Australia, not acting in the capacity as a trustee.
2) The activities must qualify as R&D activities. R&D activities are activities which are either ‘systematic, investigative and experimental activities involving innovation or high levels of technical risk’ (SIE activities), or activities which are directly related to carrying on the SIE activities.
3) A R&D plan and adequate R&D records are maintained.
4) A minimum of $20,000 R&D expenditure was incurred unless the R&D is contracted to an approved Registered Research Agency.
If you have a query, please do not hesitate to contact us.
More great articles coming soon. |
