The Research and Development (R&D) tax incentive was introduced to support companies who engage in R&D, by providing a tax offset for eligible R&D activities.
The two core components being:
A refundable tax offset for certain eligible entities whose aggregated turnover is less than $20 million.
A non-refundable tax offset for all other eligible entities.
The definition is purposefully broad in order to support R&D across many different business and industry sectors. The program supports many industries including IT, manufacturing, IT, biotechnology, agriculture and more.
The objective of the R&D Tax Incentive program is to provide a tax offset to make companies more competitive and improve productivity across the Australian economy by:
Encouraging industry to conduct R&D that may not otherwise have been conducted.
Providing business with more predictable, less complex support.
Improving the incentive for smaller firms to engage in R&D.
Initial engagement meeting to learn about your business and determine eligibility
Identification and education - shortlist potential eligible activities
Scope and classify the activities - core and supporting activities
Technical project descriptions - to support the claim
Collate costs - work with the accounts team to gather eligible costs
Prepare and review the R&D application form
Provide the R&D tax schedule - provided for the annual tax return
How to Apply?
Prepare application including supporting documentation
Lodge with AusIndustry
AusIndustry reviews and processes claim
Receive rego number from AusIndustry
Lodge annual tax return with rego number
ATO process claim
Refund or incentive received
The two bodies overseeing the program:
Australian Taxation Office (ATO)
AusIndustry is responsible for reviewing the eligibility of the R&D activities.
Registration with AusIndustry is required each financial year in which R&D expenditure has been spent. Registration is due no later than ten months after the financial year i.e. 30th of April for 30 June end of the year.
The ATO is responsible for reviewing the claimed expenditures after AusIndustry has approved the application.
What is the difference between the R&D Tax Incentive and Government Grants?
The R&D tax incentive is not a grant. Grants are fixed pools of funds and applicants must complete for a slice of the pie. The R&D Tax Incentive is available to all eligible companies, regardless of what has been paid out.
How can Leap help?
Today more than ever the process to get it right is hard. Increased scrutiny & review activity on R&D activities. Our team have a depth of experiencing in assessing, lodging and supporting R&D grants with a focus of evidence to back claims.
Leap can review your eligibility at no cost. If we determine your business isn't eligible, no cost will be charged.
Leap also have no upfront costs. Our cost structure is designed to ensure you are not out of pocket and we only get paid once lodgements and approval are finalised.