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Under recent enhancements to the R&D Tax Concession program, small firms (SMEs) can now cash out their tax losses and receive grants against allowable R&D expenditure.
Benefit
The Government acknowledges that innovative SMEs taking the risk of engaging in R&D activities gain no benefit from the tax concessions. Instead, assistance is best provided by allowing small companies to cash out their tax losses to receive grants.
This is particularly relevant during the initial growth phase when cash flow is imperative to the success of the project. The benefit is calculated by applying the 125% (tax concession) to the allowable R&D costs (salaries and materials) of the project, from which a 30% (company tax rate) grant is payable. This benefit is equivalent to the value of the deduction available through the R&D tax concession.
Who is eligible to apply?
- Companies with an annual group turnover of less than $5m.
- Grouped R&D expenditure must not be greater than $1m per year, and not less than $20,000.
- Companies must be in a tax loss situation to receive a grant.
How do I access the offset grant?
- Firstly, by registering with the IR&D Board within 10 months after the end of the company’s financial year; and
- Then claiming the R&D tax offset when filing your annual taxation return.
The TCF Way
At TCF we provided a minimum fuss/maximum return value added approach to satisfying customer expectations when accessing Commonwealth government assistance programs. Our specialist knowledge of assistance programs assures full compliance with grant Scheme legislation, and a higher return to our clients.
Our service offering incorporates a total solution which includes R&D plans, tools to capture eligible expenditure, training and the full preparation of applications and representations to both AusIndustry and the Australian Taxation Office.
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