The R&D Tax Incentive is a program delivered by both AusIndustry and the ATO aiming at encouraging industry in conducting R&D activities that might not otherwise be conducted.
It is a self-assessment program, available for eligible businesses in all industry sectors that conduct at least one experimental activity for the purpose of generating new knowledge, involving the application of a systematic progression of work proceeding from investigation of technical hypothesis in an experiment leading to a logical conclusion, in which the outcome of experiment cannot be known in advance on the basis of existing knowledge.
In this unprecedented and very concerning COVID-19 situation, cashflow is important for businesses.
The benefit of accessing the R&D Tax Incentive program is in the form of R&D Tax Offset. For example, if you are a business with an aggregated turnover of less than $20 million, not in a taxable profit position and conducting eligible R&D activities, you can claim 43.5 cents in the dollar out of the expenditure incurred on eligible R&D activities.
This means if you claim $100,000 eligible expenditure, you can get $43,500 cash refund.
Businesses must submit an R&D Application to AusIndustry within 10 months of the end of the company’s income year and submit the Tax Return (with a completed R&D Schedule) to the ATO.
For a business looking to claim 30 June 2019 R&D activities – AusIndustry has extended the deadline to 30 September 2020.
For a business looking to claim 30 June 2020 R&D activities – Application opens from 1 July 2020.
If you would like to know more about R&D Tax Incentive, feel free to get in touch.
For businesses who have submitted their FY2019 R&D, our team is able to assist with the preparation of your 2020 R&D claim ASAP for lodgement on 1 July 2020.