TCF Services launches innovative R&D Prepayment Service

Please note – There have been many changes and updates to these programs over the past few years. We love legacy content, it shows a history, it shows that we have always cared about these programs and notifying our client base. For more up to date information, please check our News or get in contact with us.

Once the Liberal Government announced it would not proceed with Labor’s initiative to allow eligible R&D companies to claim refundable tax offsets on a quarterly basis we decided to establish a prepayment service that would provide a similar benefit to our R&D Tax clients. Our prepayment service is only available to claimants for which we act on behalf of to prepare and lodge the claims AND meet the terms and conditions of our due diligence process. The prepayment service provides 2 types of offerings, the first allows clients to drawdown up to 80% of the benefit they will receive from their current 13/14 year R&D expenses after the calculation of the claim value by TCF Services but prior to lodgement thus providing a 30 – 90 days cashflow advantage.

Drawdown on your 14/15 financial year R&D benefits as you incur R&D expenses

The second offering allows R&D claimants to drawdown on their R&D expenses in the year they incur the expenditure, this can be done quarterly or half yearly, for example an R&D company incurs $200K in eligible R&D expenses between July and December 2014, in January they provide evidence of the expenditure incurred by access to accounting data, meet the eligibility criteria and our financial due diligence and are able to drawdown up to 80% of the benefit in January which provides a 7 – 9 month cash flow benefit.

– R&D Capital Partners offers R&DTI prepayment loans –

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.

Automotive Transformation Scheme Update

Please note – There have been many changes and updates to these programs over the past few years. We love legacy content, it shows a history, it shows that we have always cared about these programs and notifying our client base. For more up to date information, please check our News or get in contact with us.

In handing down its first Federal Budget the Liberal Government announced the early closure of the Automotive Transformation Scheme (ATS) from the legislated date of 31/12/2020 – to be terminated on 31/12/2017.

Budget papers confirm cuts to funding will save $618.5 million over the next 7 years resulting in $1 billion being available to all participants until the 31 December 2017.

AusIndustry monitoring conditions of ATS registrations

As eligible sales of automotive components decline, AusIndustry are closely monitoring the conditions of registration to ensure that  claimants are still eligible to receive quarterly benefits as the scheme phases out. The conditions of registration for an Automotive Component Producer (ACP) are:-

(1) It is a condition of registration for an ATS participant who is an ACP that:
(a) The ACP produce in Australia at least one kind of automotive component for use as original equipment in at least 30 000 motor vehicles or in at least 30 000 engines and that the production value of the component be at least $500 000; or
(b) The production value of the automotive components produced in Australia by the ACP as original equipment is at least $500 000 and comprises at least 50% of the production value of all automotive components produced by the ACP.

(2) In subregulation (1):
(a) The ACP must meet the requirement in each ATS year following the ATS year in which the ACP’s registration takes effect; and;
(b) The production value of automotive components produced by the ACP is the total revenue from sales of the automotive components (excluding indirect tax) in the preceding 12 months.

Eligible ATS Plant & Equipment and Research & Development Investment

The impact from closing Australian manufacturing operations by Ford, Holden and Toyota has also resulted in reduced investments by registered participants in both eligible ATS Plant & Equipment and ATS Research and Development.

Participants should ensure that their records include secondary substantiation to support:

• apportionment of any Plant and Equipment investment claims and;
• time logged by staff in undertaking R&D investments

– Federal Government announces early closure to Automotive Transformation Scheme –

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.

R&D Tax Incentive Reminder 2014

Please note – There have been many changes and updates to these programs over the past few years. We love legacy content, it shows a history, it shows that we have always cared about these programs and notifying our client base. For more up to date information, please check our News or get in contact with us.

To claim expenses paid to associated entities (by reason of family or business connections) you must have “paid” the amounts by the 30th of June 2014. If for any reason you do not pay the amounts incurred to an associate, you can either:

• claim the expenses as a standard deduction in the year they are incurred (forgoing the benefits under the R&D Tax Incentive) or
• after registering the eligible activities and expenses with AusIndustry, defer claiming the expenses to the following year when they are actually paid.

Note: The income tax law meaning of the word “paid” also includes constructive payments. If expenditure is incurred on goods and services provided by an entity that it is connected or affiliated with you, the R&D notional deduction is reduced to the actual cost. Any ‘marked-up’ value is ignored, however the ‘mark-up’ amount may be deductible under ordinary deduction provisions.

R&D Start-up owners – taking a salary is the better option

If you are not taking a salary this year as you are trying to keep costs low whilst you kick off your R&D start-up business, think again as this is probably not in your best interests. The R&D Tax Incentive reimburses up to 45% of eligible R&D costs, so if you are spending most of your time doing R&D you should consider paying yourself an annual salary before the 30th of June to accurately value your contribution to R&D in your company which is evidenced by payment of the PAYG tax payable in mid-July.  The associated superannuation guarantee levy related to any salaries paid should also be paid to avoid any penalties.  As the ATO puts no limitation on what you decide to do with the net portion of your salary you may decide to loan it back to your company, by doing so the benefit would be the differential between the personal tax rate paid on the salary and the 45% tax offset earned by the company.

Note: Directors fees are not eligible under the R&D Tax Incentive.

Applications for Advance findings must be lodged by June 30th

If an R&D entity requires a legally binding ruling to ensure that its 2013-2014 financial year R&D activities are in fact eligible, it must seek approval by lodging an Advance finding application by the 30th of June 2014.  A positive Advance ruling can be sought covering the current income year where an application is made and the subsequent two consecutive claim years.  For consolidated groups, it is the head company of the group that must apply for the Advance finding on behalf of their subsidiary, if the subsidiary is the one conducting the R&D activities.

Note: An Advance finding is not a pre-condition of registration.  Companies will still be required to register their activities at the end of each income year that the activities were conducted.

Applications for Overseas findings must be lodged by June 30th

If an R&D entity wishes to claim costs related to overseas R&D activities that occurred in the 2013-2014 financial year, it must seek approval to do so by lodging an Overseas finding application by the 30th of June 2014. To be eligible to claim overseas R&D costs, the overseas R&D activities:

• must have a significant scientific link to the Australian based core R&D activities
• are unable to be conducted in Australia
• and their related costs must be less than the R&D costs incurred in Australia

– Research and Development – R&D Tax Reminder 2014 –

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.

Federal Government cuts BIC grants for Clothing industry one year earlier than expected

Please note – There have been many changes and updates to these programs over the past few years. We love legacy content, it shows a history, it shows that we have always cared about these programs and notifying our client base.
For more up to date information, please check our News or get in contact with us.

As an outcome of the Federal Government’s 2014 Budget the Clothing and Household Textile Building Innovative Capability scheme (known as the BIC scheme) has had the last program year (2014/15) cut one year earlier than originally legislated.

This means that the last date for incurring eligible innovation expenditure is 30 June 2014. Grants relating to the 2012-13 program year are not affected and will be paid shortly. Claims relating to the 2013-14 program year are also not impacted and will be paid in the normal course by 10 June 2015.

As this change will require an amendment to the governing legislation, the Clothing and Household Textile Building Innovative Capability Scheme amending legislation will be introduced by the Government into the Parliament in the near term and require Senate approval, without Senate approval the change won’t eventuate.

On behalf of our BIC scheme clients we are exploring options to make a case to lobby Government, the Opposition, the minor parties and Independents to gain the required support to have this decision overturned.

Once we receive further advice I will seek your support to give weight to our industry representations.

– Federal Government cuts BIC Clothing grants –

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.