R&D tax credits represent a generous incentive for eligible companies who spend funds on experimental activities.
The Research & Development (R&D) Tax Incentive can potentially deliver a sizeable reduction in company tax and, in certain circumstances, generate a sizeable tax refund. This will allow your business to grow and have the cash flow to further your innovation.
How we help clients
Administered jointly by the ATO and AusIndustry, the R&D Tax Incentive is a rules-based entitlement program, meaning if an applicant is eligible, the applicant is entitled to the benefit.
HLB Mann Judd’s experts assist innovative businesses to manage, prepare and execute R&D Tax Incentive applications and deploy a range of processes to streamline the process.
The R&D Tax Incentive is much broader than many companies realise. It applies to R&D activities and expenditure in income years commencing on or after 1 July 2011.
R&D activities and expenditure conducted from 1 July 2021 are eligible for new incentive benefits.
- A refundable tax offset equal to your corporate tax rate of 25% (applicable for income years starting on or after 1 July 2021) plus an 18.5% premium for eligible entities with an aggregated turnover of less than $20 million per annum, making the refund amount 43.5% of eligible R&D spend.
- A non-refundable tax offset equal to your corporate tax rate plus a premium based on R&D intensity for eligible entities with an aggregated turnover of $20 million or more per annum.
- 8.5% premium for eligible entities on R&D intensity of less than 2%
- 16.5% premium for eligible entities on R&D intensity of more than 2%
Note: R&D intensity is measured as a proportion of R&D expenditure to total expenditure, this calculation is not straight forward, we are happy to assist with the calculation.
Registrants must delineate between CORE (experimental) activities and SUPPORTING (directly related) activities in R&D projects. They must also conduct a dominant purpose test for supporting activities.
We deliver the following services:
- A free and anonymous online eligibility self-assessment test
- Project management and compliance tools
- Annual registration development and lodgement
- R&D tax schedule preparation
- R&D review and audit assistance
- R&D advance finding – providing certainty that your activities are eligible
- Completion of the income tax return, including R&D schedule.
Many potentially eligible companies fail to make use of this incentive due to insufficient knowledge of the eligibility requirements. Speak to one of our specialists to explore the possibilities.
Helpful tools for innovative businesses
Watch HLB Mann Judd Sydney partner, Mariana Von-Lucken share insights on the following: