Research and Development Tax Incentive – Key Lodgement Reminders 2024

R&D Tax agent - Deadline Reminder 2023

Key lodgement date reminder – don’t miss out!

R&D Tax Incentive – applications to register R&D activities must be lodged by 30th April,2024

Newsletter | February 22, 2024


 

For companies with a standard June 30th reporting year-end, the deadline for lodging your 22/23 financial year R&D activities registration is fast approaching on 30th April. Other entities with a substituted accounting period have 10 months from the completion of their financial year to register.

 
 

Tips for lodging a claim under the R&D Tax Incentive

When deciding to claim the Research & Development Tax Incentive (RDTI), there are many things to consider to ensure you are lodging a defendable RDTI claim, these include:

 

Tip #1

It is strongly recommended you engage a reputable R&D Tax agent who understands your technology. This will enable you to confirm eligibility through the identification of eligible Core and Supporting activities under which eligible expenses can be linked and claimed.

While it’s possible for claimants to file R&D tax claims without the help of an agent, the program’s complexities can increase the chances of audit and rejection up to 4-5 years after receiving the benefit. In such cases, the claimant would need to pay back the initial benefit along with penalties and interest.

 

Tip #2

As an RDTI registration application can only be lodged up to 10 months after the completion of each financial year, maintaining contemporaneous R&D records is important for the following reasons:

  • It is difficult to remember specific details of the R&D activities that were undertaken in a prior year
  • Having to go back through the files and collect all the relevant documents and costs that are associated with the R&D activities makes the RDTI process onerous
  • It could lead to a reduced claim as not all the R&D activities/expenditure can be backed up
  • To ensure compliance in case your claim is audited

If records are maintained (and date stamped) throughout the R&D activities and placed in an R&D file, it will make the process easier when it is time to submit the application. This will make them more accurate, strengthening the validity of the R&D claim.

 

Tip #3

Ensure any R&D expenditure incurred to an associate (related entity) is paid before the end of the financial year so that you drawdown the R&D benefit related to the costs as opposed to having to carry it forward in your tax return until it’s paid.

Lodge the RDTI application early. The processing time for RDTI registration applications has increased due to the increasing number of applicants and the more in-depth review processes recently implemented by AusIndustry, the prior 10 day processing period has increased to:

  • 40 business days for first-time registrants
  • 20 business days for registrants that have applied within 6 months after the end of the income period
  • 80 business days for registrations submitted from 6 to 10 months after the end of the income period.

Remember you can’t claim your R&D Tax benefit in your tax return until AusIndustry has firstly processed and registered your project activities. Therefore, it’s important to maintain contemporaneous records, lodge the registration application as early as possible and ensure your external accountant is preparing your financial statements up to draft tax return stage whilst AusIndustry is processing the registration application. Having these measures in place will allow the tax return to be lodged on time, avoiding the need to lodge an amended tax return which will delay the receipt of the benefit

 
 

Which costs can be claimed under the RDTI?

When analysing the R&D entity’s financials, the R&D expenditure needs to be allocated into the following 9 categories in which eligible expenditure can be claimed. Please note there are many nuances to the RDTI and this is a general guide.

 

R&D expenditure – Research Service Provider

Registered Research Service Provider’s (RSP’s) are entities approved by Innovation Australia and are unrelated to the R&D entity. As RSP’s have appropriate scientific or technical expertise and resources, they can perform R&D on behalf of an R&D entity and are therefore the RSP expenses are eligible to be claimed under the RDTI.

 

R&D expenditure – Contract expenditure (not RSP)

Contractors (other than RSP’s) that undertake R&D activities are eligible to be claimed under the RDTI. It is important to consider the following when employing an R&D Contractor,

  • Make sure the specific R&D activities they will be working on are detailed when preparing their Contract / Scope of Activities statement.
  • Ask the Contractor to distinguish their time between the R&D activities and non-R&D activities on their invoices and Progress Reports.
  • Detail minutes of any meetings between yourself and the contractor (this will assist in keeping contemporaneous records)
  • It is also important to note that if Contractor payments are paid into a family trust, further investigation on RDTI eligibility is required.

 

R&D expenditure – Salary expenditure

Salaries and wages of employees engaged directly in conducting eligible R&D activities can be eligible under the RDTI to the extent of their R&D involvement. The relevant employees may include:

  • researchers undertaking the conception and/or creation of new knowledge and products
  • employees undertaking technical tasks in support of the R&D activities, such as persons keeping records, preparing charts and graphs, operating equipment, and writing computer programs
  • supervisors of researchers and technical staff.

It is important to note that superannuation can contribute to the Salary Expenditure and must be paid by the 28th of July each year.

If a salary is paid via a loan account, further investigation will be required.

 

R&D expenditure – Other

This general category can be split into two types of expenditure

  1. Direct; which is expenditure directly related to R&D activities such as R&D related travel, R&D materials (including overseas purchases), or hiring specific equipment that is used for R&D only etc.)
  2. Overhead; these expenses are apportionable (to the extent of R&D) such as rent, internet and electricity etc.

The rate of apportionment can be determined 3 ways and the most appropriate rate will be allocated to the R&D entity.

  • Cost Rate: the total R&D wages vs. total wages
  • Hourly Rate: the total R&D hours vs. the total hours worked
  • Floor Space: the floor area used for R&D activities vs. the total floor space

 

R&D expenditure – Feedstock input expenditure

Goods or materials that are transformed or processed during R&D activities along with the energy input directly into that transformation or processing are eligible under the RDTI,

However, if the feedstock used and transformed through R&D activities results in a tangible product that is then sold or used for internal purposes, a feedstock adjustment will be required.

 

R&D expenditure – Paid to associates in the current year

Generally, associates are entities that by reason of family, ownership or business connections, might appropriately be regarded as being associates to the claimant company. This includes wages and contracting payments to the directors or owners of the company as well as contracting fees to companies that have similar owners. Common non-arms-length transactions can include companies that may have a separate company for their intellectual property or staff that contract across R&D expenditure. Association also applies to companies that might be owned by a spouse or related family and other similar arrangements.

R&D associate expenditure must be identified and recorded in the financial year it was incurred and only claimed under the RDTI once it’s paid. This means that if the R&D associate expenditure incurred was not paid for within the financial year, it will be noted as unpaid and carried forward until payment is made, making it claimable in a future year.

 

R&D assets – Decline in value

  • The depreciation on registered assets used for R&D activities in the claim year are eligible under the RDTI.
  • R&D Prototypes need to be depreciated over their useful life.
  • Please note that Pooled assets aren’t eligible as the tax treatment is already favourable
  • It is also important to note that the assets that are treated under Simplified Depreciation rules (Instant asset write off) are not eligible under the RDTI with the exception of the Temporary Full Expensing treatment which allows assets to be fully expensed.

 

R&D assets – Balancing adjustment losses

The sale or disposal of a depreciable R&D asset that would normally give rise to a Section 40-285 balancing adjustment will be affected by the RDTI.

If an asset was used to conduct R&D activities, it entitles the claimant to claim the balancing adjustment deduction as a notional deduction for R&D instead of a normal deduction. Conversely, if a claimant receives a sale price greater than the adjustable value (purchase price minus depreciation) this should be reflected as an increase in assessable income to reduce the R&D benefit previously received.

 

Cooperative Research Centre contributions

Similar to RSP’s mentioned above, Cooperative Research Centre’s (CRC’s) have appropriate scientific or technical expertise and resources, but they perform R&D on behalf of multiple participants who fund the research via contributions. These contributions are eligible under the RDTI.

 
 

Ryan deliver a unique contemporaneous record keeping solution.

Give us a call today for assistance with your claimwork.

 
 

Services
Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Provide prepayment loans against future cash refunds under the R&D Tax Incentive
  • Keeping industry informed on all new Government policy and grant initiatives

Don’t hesitate to give us a call or schedule a free assessment.

The Industry Growth Program

Industry Growth Program

Industry Growth Program

NEWS BULLETIN | November 28th, 2023


 

Are you an SME looking to commercialise and grow in revenue?

Is your current project aligned with any of these National Reconstruction Fund (NRF) Priority areas?

If so, you may be eligible to access up to $5 million in funding from AusIndustry through the Industry Growth Program. This program was officially launched on November 27th, 2023 and consists of two parts. It will connect you with an Industry Growth Program adviser who will provide invaluable advice on how you can commercialise and grow your SME using available grants and funding.

The advice provided by the adviser is tailored specifically to your business and industry and may include:

  • Commercialisation and growth strategies, including business model validation.
  • Funding avenues, potential investors, and capital raising opportunities.
  • Building networks and establishing collaborative partnerships.
  • Commercialization of intellectual property.
  • Market testing.
  • Development of compelling value propositions.

 
 

What do you get?

Once you have received this advice, you may also be able to apply for grants recommended by your Industry Growth Program adviser:

  1. Grants ranging from $50,000 to $250,000 to support early-stage commercialisation projects.
  2. Grants ranging from $100,000 to $5 million for commercialisation and growth projects.

 
 

Are you eligible?

To be eligible for this program, you must have an ABN, be non-income-tax exempt, be registered for GST, and satisfy the following requirements:

  • Have a combined annual turnover of less than 20m for each of the past three financial years.
  • Have an innovative product, process or service in one of the aforementioned NRF priority areas.

 
 

How do I apply for an adviser?

  1. Read the official guide to the program here!
  2. Set up an account on their online access portal
  3. Provide all the necessary information
  4. Address the eligiblity criteria for the adviser service.

Should your application be complete and judged within the criteria, you will be contacted by your Industry Growth Program adviser.

For a full description of the process and requirements, please see the program information guide available here from AusIndustry, or give us a call here at Ryan, we are happy to walk you through the process.

 
 

Need Help?

Ryan can help advise you on your application and assist you to access a wide range of other grants and services, including, among others, the R&D Tax Incentive, Export Market Development Grant (EMDG), and the MVP Ventures fund.

Ryan provides specialised comprehensive technical and financial consulting assistance to businesses aiming to claim the R&D Tax Incentive. Our experts work with integrity, understanding the intricate details of the application process, considering all facets of eligibility and relevant activities.

 
 

SCHEDULE A TIME TO TALK TO OUR EXPERIENCED TEAM OF R&D CONSULTANTS HERE.

Give us a call today for assistance with your application.

 
 

Services
Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Keeping industry informed on all new Government policy and grant initiatives

Don’t hesitate to give us a call or schedule a free assessment.

MVP Ventures Program NSW

MVP Ventures Program - several young entrepreneurs involved in a startup

MVP Ventures Program NSW

NEWS BULLETIN | November 9th, 2023


 

Are you ready to seize the opportunity offered by the MVP Ventures Program?

The NSW MVP Ventures Program is designed to support startups and SMEs, bridging the gap between early-stage research and mature investment opportunities. It provides crucial funding for projects directly related to the development and commercialisation of innovative products or processes. With grants covering 50% of eligible expenditures ranging from $25,000 to $50,000, this program is your gateway to the market.

 

Program Highlights

Program Highlights:

  • Status: Opening soon
  • Grant Amount: Ranging from $25,000 to $50,000
  • Round 1 EOI Applications Open: Starting from December 4, 2023
  • Round 1 Applications Close: April 30, 2024, at 4:30 PM AEST

 

Eligibility and Eligible Projects

To be eligible, you must:

  • Meet specific criteria, including having an ABN, being headquartered in NSW, and holding intellectual property or rights to commercialise.
  • Eligible projects must progress along the Technology Readiness Level (TRL) scale between 3 and 9 and align with NSW Government Industry Development Framework priority industries.

You must also:

  • Not be an entity or a subsidiary of a group of companies with an aggregated turnover exceeding A$1 million for each of the three financial years prior to your application submission
  • Not be an entity or a subsidiary of a group of companies with more than a total of 20 full-time equivalent employees (FTE).

The program prioritises industries such as:

  • Agriculture and agri-food, Resources,
  • Defence and aerospace,
  • Clean energy and waste,
  • Medical and life sciences,
  • Digital systems and software,
  • International education,
  • Visitor economy,
  • Advanced manufacturing,
  • Biotechnologies, and
  • Digital technologies.

Eligible projects could include:

  • Prototyping and piloting studies,
  • Demonstrating the commercial viability of an innovative product or process to a customer or investor,
  • Completing the development of an innovative product or process,
  • Demonstrating a product or process in an operational environment.

 

Navigating Eligible Expenditure

Funding will only be provided to projects based on eligible expenditure that is non-recurring and directly related to the development and commercialisation of your product or process, including:

  1. Wages, consultant fees, direct prototyping materials, equipment, and other direct costs such as patent filing and travel
  2. Only costs of materials and labor directly used in your project from third-party sources are considered eligible.
  3. It’s crucial that you understand the guidelines for eligible and ineligible expenses may be updated over time, but the rules in place when you apply will apply to your project if successful.
  4. Attract and retain commercialisation activities in NSW.
  5. Applications will be considered on a non-competitive basis against the eligibility and assessment criteria and will be assessed in the order in which they are received.

 

Seize the Opportunity

This is your chance to turn your innovative vision into reality and make your mark on the industries of the future. Ryan are experienced providers and we are here to support you every step of the way.

 
 

SCHEDULE A TIME TO TALK TO OUR EXPERIENCED TEAM OF R&D CONSULTANTS HERE.

Give us a call today for assistance with your application.

 
 

Services
Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Keeping industry informed on all new Government policy and grant initiatives

Don’t hesitate to give us a call or schedule a free assessment.

Maximise Your R&D Tax Incentive Benefits with Expert Tips

R&D Tax experts

Maximise Your R&D Tax Incentive Benefits with Expert Tips

NEWS BULLETIN | August 22nd, 2023


 

Are you ready to make the most of the Research & Development Tax Incentive (RDTI)? We understand that navigating this process can be complex, but we’re here to help you succeed. Here are essential tips to ensure your RDTI claim is both solid and rewarding:

 

Tip #1: Partner with Seasoned R&D Tax Experts

Leverage the expertise of a reputable R&D Tax agent who comprehends your technology landscape. Their insights will help confirm your eligibility and align eligible Core and Supporting activities with claimable expenses. While self-preparation is possible, the intricate nature of the program increases the risk of claim disputes, potentially leading to repayments, penalties, and interest.

 

Tip #2: Keep Comprehensive and Timely Records

Maintain contemporaneous R&D records as you go along. This minimises the challenge of recalling specifics from prior years and streamlines the RDTI process. Your well-organised documentation strengthens the validity of your claim and safeguards you in case of audits.

 

Tip #3: Time Your Expenditures and Applications Smartly

Ensure R&D expenditures to associates are settled by the financial year-end to optimise your R&D benefit. Companies are urged to lodge their R&D Tax Incentive registration applications as early as possible, given the dynamic processing times by AusIndustry. While the standard duration aims for 80 days, factors like high-demand periods (April-July, October-November), application complexity, and compliance reviews can extend processing. Despite potential variations, AusIndustry remains committed to processing within the defined timelines whenever achievable. Lodging as early as possible ensures companies receive the benefit earlier.

 

Maximise Your Claimable Expenses

When analysing your financials, allocate your R&D expenditure across the following categories:

  • Research Service Provider (RSP) Expenses
  • Contractor Expenses (non-RSP)
  • Salary Expenditures
  • Other Direct and Overhead Expenses
  • Feedstock Input Expenditure
  • Expenditures to Associates
  • Decline in Value of R&D Assets
  • Balancing Adjustment Losses on Assets
  • Cooperative Research Centre Contributions

Our expert team is equipped to guide you through the finer nuances of these categories, ensuring you capture every eligible expense to enhance your R&D Tax Incentive benefits.

Don’t leave money on the table – let us help you navigate the intricacies of the RDTI and secure the rewards you deserve. Contact us today to start optimising your R&D Tax Incentive claim.

 
 

SCHEDULE A TIME TO TALK TO OUR EXPERIENCED TEAM OF R&D CONSULTANTS HERE.

Give us a call today for assistance with your application.

 
 

Services
Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Keeping industry informed on all new Government policy and grant initiatives

Don’t hesitate to give us a call or schedule a free assessment.

Industry R&D Infrastructure Fund

Industry R&D Infrastructure Fund

Industry R&D Infrastructure Fund

A Visionary $15 Million Victorian Government Initiative

NEWS BULLETIN | July 12th, 2023


 

We are excited to introduce you to a groundbreaking opportunity that can revolutionize your business’s research and development capabilities. The Industry R&D Infrastructure Fund, a visionary $15 million initiative by the Victorian Government, is set to empower businesses like yours to drive innovation, enhance R&D infrastructure, and foster long-term growth in Victoria’s key industry sectors.

By investing in cutting-edge research and development infrastructure, you can position your business at the forefront of Victoria’s R&D landscape.

 
 

HOW MUCH FUNDING IS AVAILABLE

The Fund offers grants ranging from $250,000 to $2 million, available to eligible businesses on a cash co-contribution basis ($1 for every $1 granted).

With a minimum eligible project expenditure of $500,000, you can receive up to 50% coverage of eligible project expenses.

NOTE: Funding will not be provided for retrospective activities

The Industry R&D Infrastructure Fund is designed to complement the Australian Government’s R&D Tax Incentive program by directly supporting business investment in R&D infrastructure and/or technology. Note that approval for funding is independent of and does not guarantee entitlement to the tax offset under the R&DTI..

 
 

WHO IS IT FOR & WHO BENEFITS

  • businesses that have identified key R&D equipment/infrastructure that will support their R&D activities and anchor their operation in Victoria
  • businesses that provide R&D services.
  • have an operating presence in Victoria
  • employ at least 20 full-time equivalent (FTE) staff or have an annual turnover greater than $1.5 million.

 

The potential benefits that this funding can bring are extensive and diverse., benefiting both your business and the industry as a whole. By strategically leveraging this opportunity, you can amplify Victoria’s R&D activity, driving progress in the following priority sectors:

  1. New Energy Technologies: Embrace the future of energy with advancements in wind, hydrogen, solar, and battery technologies.
  2. Health Technologies: Innovate in the fields of medtech, biotech, pharmaceuticals, and consumer healthcare to improve lives and reshape the industry.
  3. Food Manufacturing and Agriculture: Enhance food manufacturing processes and transform the agricultural sector with groundbreaking advancements.
  4. Defence, Aerospace, and Space: Pioneer technological breakthroughs in defence, aerospace, and space exploration to bolster Victoria’s presence on a global scale.
  5. Digital and Advanced Technologies: Unlock the potential of advanced materials, robotics, AI (Artificial Intelligence), 3D-printing, and quantum technologies, propelling Victoria into the digital age.

 

While the above industries are the main focus, the Fund is also open to projects aligned with other sectors, encouraging innovation and progress across various fields.

  • Genomics analysis for advancements in agriculture and human health.
  • The fabrication, testing, and advanced engineering of novel materials and devices.
  • Imaging technologies for analyzing materials and molecular structures.
  • Optical and radio-telescopes for breakthroughs in astronomy.
  • Specialist machinery design, construction, or modification.
  • Building or modifying manufacturing facilities, such as clean rooms for medical device production.
  • Environmentally friendly process innovations, reducing waste and promoting sustainability.
  • Upgrading existing R&D equipment or establishing new suites of equipment, catering to the priority sectors’ needs.
  • Underpinning capabilities, such as data collection and analysis.

 
 

HOW IT COULD HELP

  1. Directly supports industry investment in new or enhanced R&D infrastructure, leading to increased R&D activity.
  2. Facilitates high-quality collaborations between industry, universities, and research providers, fostering valuable research partnerships.
  3. Generates broader benefits for manufacturing, supply chains, and workforce upskilling, specifically targeting priority industry sectors.

 
 

WHAT IS R&D INFRASTRUCTURE

R&D infrastructure refers to a diverse range of sophisticated equipment and services that drive cutting-edge research and innovation across disciplines. This can encompass:

  • Genomics analysis for advancements in agriculture and human health.
  • The fabrication, testing, and advanced engineering of novel materials and devices.
  • Imaging technologies for analyzing materials and molecular structures.
  • Optical and radio-telescopes for breakthroughs in astronomy.
  • Specialist machinery design, construction, or modification.
  • Building or modifying manufacturing facilities, such as clean rooms for medical device production.
  • Environmentally friendly process innovations, reducing waste and promoting sustainability.
  • Upgrading existing R&D equipment or establishing new suites of equipment, catering to the priority sectors’ needs.
  • Underpinning capabilities, such as data collection and analysis.

R&D infrastructure can be operated by a single applicant for internal use or as collaborative, cross-disciplinary facilities that serve multiple organizations and foster innovation networks.

 

ELIGIBLE PROJECT EXPENDITURE INCLUDES:

  1. capital expenditure (e.g., testing or specialised machinery, equipment and technology)
  2. capital expenditure incurred to construct a building or part of a building
  3. building costs associated with an extension alteration or improvement to a building
  4. training of staff specific to the installation or operation of the new R&D infrastructure
  5. labour and contractor expenses related to installation and commissioning of equipment or facilities
  6. Accreditation expenses associated with equipment and/or facilities being assessed and granted industry-relevant standards (e.g. ISO standards)

 

HOW TO APPLY

Don’t miss this chance to transform your business’s R&D capabilities and contribute to Victoria’s flourishing innovation ecosystem. Seize the opportunity to secure funding for your ambitious projects, driving both short-term growth and long-term success.

To explore the possibilities and learn more about the application process, give us a call

Read the FAQ’s here

Unlock the power of innovation and shape the future of Victoria’s key industries with the Industry R&D Infrastructure Fund.

 

“expertise you can trust”


 

Working with Ryan

Ryan has a track record of delivering over $2 billion in tax incentives and grants to clients in the past 30 years. With expertise in software, manufacturing, agribusiness, fintech, health science, cleantech/renewables and FMCG/Food, our business service managers are well equipped to step you through the process.

 
 

Schedule an R&D Scope with Ryan here.

Give us a call today for assistance with your application.

 
 

Services
Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Keeping industry informed on all new Government policy and grant initiatives

Don’t hesitate to give us a call or schedule a free assessment.

Industry Growth Program- $392m Industry Fund

Industry Growth Program

Industry Growth Program

An extraordinary opportunity for SME’s and R&D companies!

NEWS BULLETIN | June 29th, 2023


 

Are you ready to take your business to new heights? We have some exciting news that could transform your company and propel your innovative projects towards success!

Introducing the game-changing Industry Growth Program—an extraordinary opportunity for SME’s and R&D companies like yours to access unparalleled support and funding. Backed by the Albanese government’s visionary $392 million initiative, this program aims to bridge the notorious “valley of death” funding gap that often hampers the growth of promising SMEs and R&D ventures.

 

So, how can this program benefit your company?

Here’s a glimpse into the opportunities that await you:


 

  1. Early-Stage Commercialization Support: Are you on the verge of taking your groundbreaking ideas to the market? The Industry Growth Program offers invaluable advice and guidance from experienced IGP advisers who specialize in commercialization strategies. Their expertise will help you navigate the challenges and seize opportunities, ensuring a successful entry into the market.
  2. Matched Grant Funding: We understand that funding is a crucial aspect of bringing your innovative projects to life. That’s why the Industry Growth Program provides access to matched grant funding of up to a staggering $5 million. Imagine the possibilities and resources you could unlock with this financial support!
  3. Access to Industry Partners and Specialized Services: As a participant in the Industry Growth Program, you’ll have the chance to collaborate with esteemed industry partner organizations. These carefully selected partners will offer specialized advisory services tailored to your unique needs, further enhancing your growth potential and market competitiveness.
  4. Align with National Priorities: Your R&D projects can play a vital role in shaping the future of Australia. The Industry Growth Program focuses on priority areas aligned with the $15 billion National Reconstruction Fund, including agriculture, resources, transport, medical science, renewables, defense capability, and enabling capabilities. By participating, you’ll have the opportunity to contribute to national reconstruction efforts and make a tangible impact on these crucial sectors.
  5. Enhance Your Capabilities: The program’s emphasis on commercialization and early-stage business growth means that you’ll not only receive financial support but also gain access to valuable resources and expertise. Elevate your capabilities, build a solid foundation, and position your R&D company as a leader in your field.

 

This is your chance to thrive in the Australian market and be recognized as a key driver of future economic growth. The Industry Growth Program is your gateway to success! You can read more about it here.

Ready to seize this incredible opportunity? Act now and share your feedback during the ongoing consultation period, which concludes on July 30, 2023. Don’t miss out on shaping the program’s criteria and ensuring it aligns with your needs as a R&D company.

Unleash your R&D company’s true potential with the support and resources offered by the Industry Growth Program. Together with the Australian Government, you can make your groundbreaking ideas a reality!

 

“expertise you can trust”


 

Working with Ryan

Ryan has a track record of delivering over $2 billion in tax incentives and grants to clients in the past 30 years. With expertise in software, manufacturing, agribusiness, fintech, health science, cleantech/renewables and FMCG/Food, our business service managers are well equipped to step you through the process.

 
 

Schedule an R&D Tax Incentive Health Check with Ryan here.

Give us a call today for assistance with your application.

 
 

Services
Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Keeping industry informed on all new Government policy and grant initiatives

Don’t hesitate to give us a call or schedule a free assessment.

CSIRO Innovate to Grow – R&D Program

Innovate to Grow Photo by RDNE Stock project: https://www.pexels.com/photo/marketing-exit-technology-business-7413915/

Innovate to Grow is now open!

Exciting news for SMEs! Applications are open for a free 10-week program focused on advanced manufacturing solutions

NEWS BULLETIN | July 6th, 2023


 

What is the CSIRO Innovate to Grow program:

CSIRO’s Advanced Manufacturing Program is dedicated to fostering advancements in various domains, including digital solutions, smart robotics, additive manufacturing, advanced materials and processes, quantum technology, mechatronics design and engineering, and biomedical manufacturing. By participating in this program, you position your business at the forefront of innovation and gain a competitive edge in your industry.

Key things covered in this program include:

  • Identifying your innovation opportunities.
  • Refining your value proposition.
  • Understanding the R&D viability.
  • Helping you build your business case.

 
 

Who can Participate

Participants working in advanced manufacturing sectors. This can be in any sub-sector including:

  • Digital solutions and smart robotics
  • Additive manufacturing
  • Advanced materials and processes
  • Quantum technology
  • Mechatronics design and engineering
  • Biomedical manufacturing
  • Energy storage and battery technology

 
 

Inspiring Success Story

Take inspiration from businesses like Connop Metal, who experienced remarkable success through CSIRO’s Manufacturing Program. Connop Metal developed a revolutionary method for analyzing the chemical compositions of polyvinyl chloride (PVC), making it recyclable—a groundbreaking achievement that has positioned them as industry leaders.

 
 

Revolutionize Your R&D Capabilities

Secure your place today by visiting the Program Registration Link and submitting your application before the deadline on 17 July 2023

Don’t miss this opportunity to leverage the expertise of CSIRO and propel your business to new heights.

 

“expertise you can trust”


 

Working with Ryan

Ryan has a track record of delivering over $2 billion in tax incentives and grants to clients in the past 30 years. With expertise in software, manufacturing, agribusiness, fintech, health science, cleantech/renewables and FMCG/Food, our business service managers are well equipped to step you through the process.

 
 

Schedule an R&D Tax Incentive Health Check with Ryan here.

Give us a call today for assistance with your application.

 
 

Services
Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Keeping industry informed on all new Government policy and grant initiatives

Don’t hesitate to give us a call or schedule a free assessment.

Austrade to Provide Early Payments to Some EMDG Grant Recipients for Eligible Expenditure

Export Market Development - Large container ship

Austrade to Provide Early EMDG Payments

Selected Grantees to Receive Funds Ahead of Schedule

NEWS BULLETIN | April 24, 2023


 

Austrade has announced that some recipients of the Export Market Development Grants (EMDG) will receive early payments for eligible expenditure incurred in the 2022-23 financial year. The early payments will be made before 30 June 2023, subject to the limit of available funds.

According to Austrade, the early payments will be made to selected grantees from Round 1 and Round 2 based on their EMDG grant history and application information. The remainder of Round 1 and Round 2 grantees will be paid in the 2023-24 financial year after Austrade receives and assesses their milestone report sometime in July onwards.

If a grantee is selected for an early payment, Austrade may contact them to confirm their eligible expenditure and conduct further checks.

All grantees, whether they receive an early payment or not, are required to submit a milestone report for expenditure incurred in the 2022-23 financial year. The EMDG online portal will open for milestone report submissions in early July 2023.

Austrade aims to process payments as soon as practicable and starting payment processing earlier this year will assist with getting grant payments to recipients sooner.

 
 

Export Market Development Grants are a specialty, Ryan cares about its partners.

Give us a call today for assistance with your application.

 
 

Services
Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Keeping industry informed on all new Government policy and grant initiatives

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RDTI claims return to pre-pandemic levels – Innovation Australia

research and development

RDTI claims return to pre-pandemic levels

An Article By: Brandon How – Innovation Australia

Innovation Australia | March 3, 2023


 

This article was published by Innovation Australia

The value of claims through the research and development tax incentive (RDTI) scheme’s non-refundable tax offset is estimated to return to pre-pandemic levels this financial year.

The non-refundable tax offset is available to companies with more than $20 million in aggregate turnover, and is effectively a discount on the amount of tax a company pays in recognition of R&D investments.

Treasury expects to forgo $530 million in aggregate revenue in financial year 2022-23 due to tax offsets through the scheme, up by $110 million from the 2021-22 estimate of $420 million, although the statement considers Treasury’s “estimate reliability” to be low.

The value of the estimated foregone income is two thirds less than the $1.16 billion peak in 2013-14.

The data was released through the government’s annual Tax Expenditures and Insights Statement on Tuesday, which also includes data on the characteristics of firms benefiting from the R&D Tax Incentive for the first time.

Over the forward estimates, the non-refundable tier of the scheme is expected to cost $570 million annually.

Business expenditure on R&D (BERD) by Australian companies has remained stagnant. In 2013-14, Australian businesses invested $18.8 billion in R&D activities, while in 2019-20 this number was $18.17 billion, representing a significant decrease in BERD as a proportion of GDP in Australia from just under 1.2 per cent to 0.9 per cent.

The breakdown of companies that accessed the R&D tax incentive is based on 2019-20 data, which predates the July 2021 changes to the system that introduced a tiered system based on an “R&D intensity” measure. The data includes only the early months of the COVID-19 pandemic.

In 2019-20, the total cost of the non-refundable tier was $380 million in forgone revenue. A total of 1,057 companies used the scheme, with larger businesses the biggest beneficiaries.

The report found businesses with revenues of more than $100 million were the chief beneficiaries of the non-refundable tier at 34 per cent and also accounted for 72 per cent of the scheme’s total benefit.

Companies with turnover of more than $250 million accounted for 30 per cent of the non-refundable tax offset, but accrued around 62 per cent of the benefit.

Smaller firms, with turnover between $10 million and $100 million, made up around 66 per cent of beneficiaries and accrued just 22 per cent of the benefit.

“The industry groups with the largest numbers of recipients during 2019–20 were Manufacturing (33 per cent), Professional, Scientific and Technical Services (22 per cent) and Wholesale and Retail Trade (16 per cent),” the tax expenditure report reads.

“The greatest share of the non-refundable R&D tax offset accrues to Manufacturing (34 per cent), followed by Professional, Scientific and Technical Services (18 per cent) and Wholesale and Retail Trade (13 per cent).”

However, according to the Department of Industry’s latest science, research, and innovation budget tables, the refundable tier made up a majority of total RDTI expenditure.

This tier is only available to small to medium-sized enterprises with an annual turnover below $20 million. Of the department’s estimate that the scheme cost $2.7 billion in 2019-20, the refundable tier cost $2.2 billion, or 81.5 per cent of the total RDTI cost.

Total R&D expenditure, as of 2020, sits at 1.79 per cent of GDP which is below the OECD average of 2.67 per cent. Ahead of next federal budget, Australia’s peak research bodies are calling on the government to increase Australia’s total R&D expenditure.

The Albanese government has committed on several occasions to get Australia’s total expenditure on R&D “closer to three per cent of GDP”. Last week Industry and Science minister Ed Husic said he wanted to “have a look at business contributions in R&D [expenditure]”.

The Australian Technology Network of Universities (ATN) said in its pre-budget submission that the previous Coalition government did not take full advantage of the significant total investment through the RDTI scheme.

ATN noted that small to medium enterprises “find it hard to gather enough capital and sufficient cash flow to invest in research and development”, and hence cannot accrue large benefits through the RDTI tax offset.

Universities Australia has called for expenditure on the RDTI scheme to be redirected towards targeted direct-funding programs. It notes that “82 per cent of Australia’s total innovation investment flows through the RDTI. This is the highest level of indirect support for R&D in the OECD”.

“Direct funding of R&D also provides flexibility in policy objectives, ensures that investment is well targeted and guarantees additionality. In contrast, indirect policy measures – such as the RDTI – suffer from persistent questions on whether the R&D activity would have been undertaken irrespective of the incentive,” the Universities Australia submission reads.

Editor’s note: This story has been edited to clarify that the figures in the Tax Expenditure and Insights Statement only represent the non-refundable tier of the RDTI.

 
 

Ryan delivers an unparalleled research and development tax incentive solution.

Give us a call today for assistance with your claimwork.

 
 

Services
Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Provide prepayment loans against future cash refunds under the R&D Tax Incentive
  • Keeping industry informed on all new Government policy and grant initiatives

Don’t hesitate to give us a call or schedule a free assessment.

Research and Development Tax Incentive – Key Lodgement Reminders 2023

R&D Tax agent - Deadline Reminder 2023

Key lodgement date reminder – don’t miss out!

R&D Tax Incentive – applications to register R&D activities must be lodged by Tuesday 2nd May, 2023

Newsletter | February 22, 2023


 

For companies with a standard June 30th reporting year-end, the deadline for lodging your 21/22 financial year R&D activities registration is fast approaching on 2nd May. Other entities with a substituted accounting period have 10 months from the completion of their financial year to register.

 

New Rates of Return

 

FY 2021-22

  • Annual revenue <$20m – Company Tax Rate: 25% – Refundable Tax Benefit: 43.5% (if matched by tax losses) or 18.5% (when trading in profit)
  • Annual revenue $20m-$50m – Company Tax Rate: 25% – Refundable Tax Benefit/2 tier benefit: 8.5% on eligible R&D expenditure which accounts for up to 2% of total company expenses and 16.5% on eligible R&D expenditure exceeding the 2% baseline.
  • Annual revenue >$50m – Company Tax Rate: 30% – Refundable Tax Benefit/2 tier benefit: 8.5% on eligible R&D expenditure up to 2% of total company expenses and 16.5% on eligible R&D expenditure exceeding the 2% baseline.

 
 

Tips for lodging a claim under the R&D Tax Incentive

When deciding to claim the Research & Development Tax Incentive (RDTI), there are many things to consider to ensure you are lodging a defendable RDTI claim, these include:

 

Tip #1

It is strongly recommended you engage a reputable R&D Tax agent who understands your technology. This will enable you to confirm eligibility through the identification of eligible Core and Supporting activities under which eligible expenses can be linked and claimed.

While it’s possible for claimants to file R&D tax claims without the help of an agent, the program’s complexities can increase the chances of audit and rejection up to 4-5 years after receiving the benefit. In such cases, the claimant would need to pay back the initial benefit along with penalties and interest.

 

Tip #2

As an RDTI registration application can only be lodged up to 10 months after the completion of each financial year, maintaining contemporaneous R&D records is important for the following reasons:

  • It is difficult to remember specific details of the R&D activities that were undertaken in a prior year
  • Having to go back through the files and collect all the relevant documents and costs that are associated with the R&D activities makes the RDTI process onerous
  • It could lead to a reduced claim as not all the R&D activities/expenditure can be backed up
  • To ensure compliance in case your claim is audited

If records are maintained (and date stamped) throughout the R&D activities and placed in an R&D file, it will make the process easier when it is time to submit the application. This will make them more accurate, strengthening the validity of the R&D claim.

 

Tip #3

Ensure any R&D expenditure incurred to an associate (related entity) is paid before the end of the financial year so that you drawdown the R&D benefit related to the costs as opposed to having to carry it forward in your tax return until it’s paid.

Lodge the RDTI application early. The processing time for RDTI registration applications has increased due to the increasing number of applicants and the more in-depth review processes recently implemented by AusIndustry, the prior 10 day processing period has increased to:

  • 40 business days for first-time registrants
  • 20 business days for registrants that have applied within 6 months after the end of the income period
  • 80 business days for registrations submitted from 6 to 10 months after the end of the income period.

Remember you can’t claim your R&D Tax benefit in your tax return until AusIndustry has firstly processed and registered your project activities. Therefore, it’s important to maintain contemporaneous records, lodge the registration application as early as possible and ensure your external accountant is preparing your financial statements up to draft tax return stage whilst AusIndustry is processing the registration application. Having these measures in place will allow the tax return to be lodged on time, avoiding the need to lodge an amended tax return which will delay the receipt of the benefit

 
 

Which costs can be claimed under the RDTI?

When analysing the R&D entity’s financials, the R&D expenditure needs to be allocated into the following 9 categories in which eligible expenditure can be claimed. Please note there are many nuances to the RDTI and this is a general guide.

 

R&D expenditure – Research Service Provider

Registered Research Service Provider’s (RSP’s) are entities approved by Innovation Australia and are unrelated to the R&D entity. As RSP’s have appropriate scientific or technical expertise and resources, they can perform R&D on behalf of an R&D entity and are therefore the RSP expenses are eligible to be claimed under the RDTI.

 

R&D expenditure – Contract expenditure (not RSP)

Contractors (other than RSP’s) that undertake R&D activities are eligible to be claimed under the RDTI. It is important to consider the following when employing an R&D Contractor,

  • Make sure the specific R&D activities they will be working on are detailed when preparing their Contract / Scope of Activities statement.
  • Ask the Contractor to distinguish their time between the R&D activities and non-R&D activities on their invoices and Progress Reports.
  • Detail minutes of any meetings between yourself and the contractor (this will assist in keeping contemporaneous records)
  • It is also important to note that if Contractor payments are paid into a family trust, further investigation on RDTI eligibility is required.

 

R&D expenditure – Salary expenditure

Salaries and wages of employees engaged directly in conducting eligible R&D activities can be eligible under the RDTI to the extent of their R&D involvement. The relevant employees may include:

  • researchers undertaking the conception and/or creation of new knowledge and products
  • employees undertaking technical tasks in support of the R&D activities, such as persons keeping records, preparing charts and graphs, operating equipment, and writing computer programs
  • supervisors of researchers and technical staff.

It is important to note that superannuation can contribute to the Salary Expenditure and must be paid by the 28th of July each year.

If a salary is paid via a loan account, further investigation will be required.

 

R&D expenditure – Other

This general category can be split into two types of expenditure

  1. Direct; which is expenditure directly related to R&D activities such as R&D related travel, R&D materials (including overseas purchases), or hiring specific equipment that is used for R&D only etc.)
  2. Overhead; these expenses are apportionable (to the extent of R&D) such as rent, internet and electricity etc.

The rate of apportionment can be determined 3 ways and the most appropriate rate will be allocated to the R&D entity.

  • Cost Rate: the total R&D wages vs. total wages
  • Hourly Rate: the total R&D hours vs. the total hours worked
  • Floor Space: the floor area used for R&D activities vs. the total floor space

 

R&D expenditure – Feedstock input expenditure

Goods or materials that are transformed or processed during R&D activities along with the energy input directly into that transformation or processing are eligible under the RDTI,

However, if the feedstock used and transformed through R&D activities results in a tangible product that is then sold or used for internal purposes, a feedstock adjustment will be required.

 

R&D expenditure – Paid to associates in the current year

Generally, associates are entities that by reason of family, ownership or business connections, might appropriately be regarded as being associates to the claimant company. This includes wages and contracting payments to the directors or owners of the company as well as contracting fees to companies that have similar owners. Common non-arms-length transactions can include companies that may have a separate company for their intellectual property or staff that contract across R&D expenditure. Association also applies to companies that might be owned by a spouse or related family and other similar arrangements.

R&D associate expenditure must be identified and recorded in the financial year it was incurred and only claimed under the RDTI once it’s paid. This means that if the R&D associate expenditure incurred was not paid for within the financial year, it will be noted as unpaid and carried forward until payment is made, making it claimable in a future year.

 

R&D assets – Decline in value

  • The depreciation on registered assets used for R&D activities in the claim year are eligible under the RDTI.
  • R&D Prototypes need to be depreciated over their useful life.
  • Please note that Pooled assets aren’t eligible as the tax treatment is already favourable
  • It is also important to note that the assets that are treated under Simplified Depreciation rules (Instant asset write off) are not eligible under the RDTI with the exception of the Temporary Full Expensing treatment which allows assets to be fully expensed.

 

R&D assets – Balancing adjustment losses

The sale or disposal of a depreciable R&D asset that would normally give rise to a Section 40-285 balancing adjustment will be affected by the RDTI.

If an asset was used to conduct R&D activities, it entitles the claimant to claim the balancing adjustment deduction as a notional deduction for R&D instead of a normal deduction. Conversely, if a claimant receives a sale price greater than the adjustable value (purchase price minus depreciation) this should be reflected as an increase in assessable income to reduce the R&D benefit previously received.

 

Cooperative Research Centre contributions

Similar to RSP’s mentioned above, Cooperative Research Centre’s (CRC’s) have appropriate scientific or technical expertise and resources, but they perform R&D on behalf of multiple participants who fund the research via contributions. These contributions are eligible under the RDTI.

 
 

Ryan deliver a unique contemporaneous record keeping solution.

Give us a call today for assistance with your claimwork.

 
 

Services
Ryan can assist with services such as:

  • Scope your potential to claim various grant programs
  • Assist with the preparation and lodgement of grant applications
  • Review or provide a health check on your internally prepared grant applications
  • Establish record-keeping practices as required under various grant programs
  • Provide prepayment loans against future cash refunds under the R&D Tax Incentive
  • Keeping industry informed on all new Government policy and grant initiatives

Don’t hesitate to give us a call or schedule a free assessment.