Category: News

Tips for Lodging an R&D Tax Incentive Claim

Newsletter | July 20, 2022

Co-Authored by James Longworth

 

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 – Engage a Reputable Agent

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.

It is possible for claimants to prepare and lodge their own claims without the assistance of R&D tax agent, however, due to the complexities of the program there is an increased risk that your claim could be challenged as audits may occur up to 4-5 years after receiving the benefit whereby if rejected would require the repayment of the initial benefit plus penalties and interest

 
 

Tip #2 – Maintain Proper Records

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 was 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 – Doublecheck your associate payments

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 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 until the 30th of June 2022.

 

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.

 

For further tips for lodging your claim,
Give us a call or schedule an assessment

 
 

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.

Key Dates & Reminders – Don’t Miss Out!

Newsletter | June 29, 2022

 
 

CONTENTS

1. R&D Tax Incentive
2. Export Market Development Grants
3. NSW Export Assistance Grant

 
 

R&D Tax Incentive

Applications to register 21/22 financial year R&D activities open on the 1st July

The increased rates of return are:

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% – Non-Refundable Tax Benefit/2 tier benefit: 8.5% on eligible R&D expenditure which accounts for up to 2% of total company expenses and an additional 16.5% on eligible R&D expenditure exceeding the 2% baseline.
• Annual revenue >$50m – Company Tax Rate: 30% – Non-Refundable Tax Benefit/2 tier benefit: 8.5% on eligible R&D expenditure up to 2% of total company expenses and an additional 16.5% on eligible R&D expenditure exceeding the 2% baseline.

End of Financial year R&D Tax Housekeeping tips:

• Pay your associated party R&D fees by 30th June each year – if an entity or contractor is associated in any way with the R&D entity ( i.e. shareholder, director, staff, or associated entity) their fees for R&D services must be paid for by the 30th June in the year of the R&D activity otherwise the ATO will not allow the claimant to drawdown the tax benefit when the tax return is lodged, instead, the unpaid associated party expense must be carried forward in the tax return and only realised when the expense is paid.
• Pay your R&D staff superannuation payments by the 30th June each year – to be eligible to claim the superannuation costs relating to R&D staff requires the superannuation to be paid on or before the end of the financial year. Similarly, late compulsory superannuation payments cannot be claimed in the financial year they apply but can be claimed in the following year when paid.

 
 

Export businesses note the following deadlines:

 
 

Export Market Development Grant

Round 2 Applications open 6th July,2022

Austrade have announced the opening of applications under Round 2 for a limited 6 week window ending the 17th of August, 2022.

Under the new EMDG program, eligible SMEs under $20m in annual revenue are eligible to apply and receive forward grant agreements commencing 1/7/22. The grant amounts provided in the 1st Round provide an indication of what may be offered to Round 2 applicants assuming the demand and funding remains stable:

Eligible marketing categories are:

• Overseas Representatives
  Costs associated with engaging an overseas representative to conduct market research and promotional activities
• Marketing Consultant/Agent
  Costs associated with engaging a consultant to undertake market research or marketing on a fee basis
• Short trips to a foreign country
  Expenses of up to 21 days’ continuous travel between Australia and a foreign country are eligible. Airfares, accommodation and meals
• Short trips within Australia
  Expenses of up to 21 days’ continuous travel within Australia are eligible if they relate to promoting to potential foreign buyers. Airfares, accommodation and meals
• Soliciting for business in a foreign country
  Costs related to soliciting for business in a foreign country for the eligible product e.g tradeshows, demo’s. in store promotions
• Free Samples
  Sample(s) production and freight costs
• Promotional literature and Advertising
  Costs of producing marketing material such as flyers and brochures, online and print advertising, photography, digital artwork, virtual events, social media marketing
• Overseas Buyers
  Costs of bringing an overseas buyer into Australia for marketing purposes. Airfares, accommodation and meals
• Overseas Patents and Trademarks
  The cost of international patent and trademark applications/registration/renewals

If you are promoting your products in foreign markets, give us a call.

*special note, Russia is now excluded from eligible countries.

Applications close 4:00 p.m. on the 17th August, 2022

NSW Export Assistance Grant

If you are an exporting business, or if you were exporting goods or services before the impacts of COVID-19, bushfires or drought, consider applying. Export businesses may be eligible for an export assistance grant of up to $10,000.

Eligible Activities

This grant helps eligible export businesses in NSW access global markets. Funds can be used for:

• marketing materials
• website internationalisation
• pivoting to online delivery (for example, converting face-to-face training content to online content for international audiences)
• e-commerce development
• market research
• international tradeshow and trade missions
• inbound business support
• costs to support compliance/localisation of products for export
• costs to protect business in international markets.

Available Funding

This grant will be provided as reimbursement of 50% of eligible expenses, up to a maximum of $10,000 per eligible business, for expenses already paid since 1 January 2020.

How to Apply

You can submit either one application up to the maximum of $10,000 or multiple applications of a minimum of $2,000 per each application, totaling a maximum of $10,000.

Applications close at 11:59pm on 30 June 2022 or when the allocated funding is exhausted.

Eligibility

To be eligible for this grant, you must:

• be based in NSW
• be currently exporting, or were exporting prior to the impacts of COVID-19, bushfires or drought
• employ a minimum of 3 full-time equivalent workers at the time of application
• own the goods/services to be exported, or be able to provide documented evidence that you are the agreed export supplier
• produce the goods/services to be exported in Australia, or be able to provide documented evidence that the business provides substantial value to NSW
• be an exporting business with an annual turnover of:
  • up to $100 million, or
  • greater than $100 million that can demonstrate export turnover has declined by more than 30% in the 2019–20 financial year and have an intention to re-establish your export business in your established markets and/or diversify into new markets.

Click here to find out more

 
 

TCF Services & Ryan have a strong history of assisting export businesses & delivering the R&D Tax Incentive

Give us a call to get started

 
 

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.

Ignite Ideas Round 9 Now Open

Newsletter | June 22, 2022

 
 

Ignite Ideas funding is available to commercialise highly innovative and new products or services that are at minimum viable product stage or beyond.

The Ignite Ideas fund is Queensland based industry support for SME businesses with high growth potential to undertake commercialisation projects that will:

• strengthen key industries in Queensland
• diversify the Queensland economy
• compete in domestic and global markets
• engage and/or benefit regional Queensland
• create new jobs, now and into the future.

For Round 9, successful recipients will be eligible for additional business development support through Advance Queensland’s new Ignite+ program.

This pilot program will provide support across sales and marketing, customer acquisition, competitor analysis, intellectual property (IP)/legal support, financial structure, connections to mentors and sponsors, and access and introductions to business and investment networks.

Funding is available in two tiers:

---

Are you Eligible?

In order to be eligible for funding, your business must:

• be headquartered in QLD
• have less than 50 full-time employees
• not be a subsidiary for a larger company
• not have already receive funding for the proposed project
• be GST registered.

Tier 1 Eligibility

• Not have received an Ignite ideas Fund previously.
• Make a cash contribution to the project equal to 20% of project cost

Tier 2 Eligibility

• not previously received a tier 2 grant
• not be applying for a product or service that has previously received Ignite Ideas funding
• your business must have successfully completed a Tier 1 funded project if a tier 1 grant was applied for.
• make a cash contribution equal to the sought funding

---

Expression of Interest applications will close Thursday, 7 July, 2022 at 10:00 a.m.

Ignite Ideas advise late applications will not be accepted.

 
 

TCF Services & Ryan have a history of delivering successful Ignite Ideas claims.

Give us a call to get started

 
 

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.

Labor Government Promises New Industry Initiatives

Newsletter |June 8, 2022

 
 

CONTENTS

1. Labour Announcements
2. Currently Open Grants
   1. Sovereign Industrial Capability Priority Grant
   2. Advanced Manufacturing Commercialisation Fund
   3. Export Market Development Grant
   4. Research & Development Tax Incentive

With every change in Government brings a new horizon whereby positive announcements are pushed out with headline promises of additional funding to drive economic change. 

The challenges we face today and the pace in which generational change is impacting our future at both a global and local level have been further impacted by multiple externalities like:

• COVID effects on supply chain/sovereign capability giving rise to an increased rate of technology adoption
• the Russia/ Ukraine conflict effects on energy supply resulting in rising costs of living 
• sovereign risks as an outcome of China’s emergence dividing the West/ East 
• as well as ongoing debate concerning collective actions required to deal with climate change in our goal to reach zero emissions. 

It’s fair to say that we will not have seen the need for such quantum change requiring major structural adjustment since the last meaningful Labor Government under Hawke/ Keating in the 1980/90’s which floated the Aussie dollar, opened the Australian economy to global competition, launched Medicare and the National Superannuation scheme in addition to  rolling out many of the industrial, environmental and social reforms which are commonly  accepted as normal practice today.  

At this stage we have seen only 2 major announcements from Labor:

 
 

1. Ed Husic appointed Minister for Industry and Science

Long-time tech and innovation advocate Ed Husic will be Australia’s new Industry Minister after he retained his portfolio in the new Labor government’s Cabinet. Mr Husic has served as Shadow Industry Minister since the start of 2021 and has advocated for the local tech and manufacturing sectors since he first entered Parliament.

Husic has already promised to review the broader innovation policy including the R&D Tax Incentives where software eligibility has been a point of conjecture for several years.  

2. $15 billion National Reconstruction Fund (NRF)

The Labor Party’s key commitment to advanced manufacturing is a $1 billion Advanced Manufacturing Fund funded under the new Government’s greater $15 billion National Reconstruction Fund. Also included is $1 billion for a Critical Technologies Fund and $1.5 billion for a Medical Manufacturing Fund.

The operating model for the NRF is the Clean Energy Finance Corporation set up under the previous Rudd/Gillard government. “It’s got an independent board, made up of smart people who will make the calls on investments,” Mr Husic said.

As we all know the devil will be in the detail so watch this space as we attempt to report on the details as and when they are released. Suffice to say that most existing Liberal funding programs will be reviewed, altered or replaced. 

 
 

The following grants are still open:

 

Sovereign Industrial Capability Priority Grant  (Defence)

A grant of $50,000 to $1 million for up to 50% of the cost of a project that builds capabilities aligned with Defence’s Sovereign Industrial Capability Priorities. The maximum grant period is 30 months.

A grant of $50,000 to $1 million for up to 50% of the cost of a project.

Grant funding is capped at $3 million in a 3-year period per recipient.

This program opened in late April and will remain open until funds are exhausted.  

 
 

Advanced Manufacturing Commercialisation Fund

The Advanced Manufacturing Commercialisation Fund provides small to medium manufacturing enterprises with matched funding to commercialise new products and processes.

Funding is available for small to medium manufacturing enterprises undertaking projects that align with one or more of the 6 National Manufacturing Priorities:

• food and beverage
• medical products
• resources technology and critical minerals processing
• recycling and clean energy
• defence
• space

Closing Date: 30 Jun 2022
Matched funding of between $100,000 and $1 million.

 
 

Export Market Development Grants

Austrade’s Export Market Development Grants (EMDG) program helps Australian businesses grow their exports in international markets. These grants encourage small to medium enterprises to market and promote their goods and services globally.
Grants of up to 50% of eligible marketing expenses are claimable up to the level of the funding cap of $157m per annum.

Round 2 applications will open soon after the Labor Government considers additional funding for the program due to the higher than expected Round 1 participation reducing  the benefit by up to 80%.  

 
 

R&D Tax Incentive

The Research and Development Tax Incentive (R&D Tax Incentive or R&DTI) provides tax offsets to incentivize local companies to undertake R&D. The financial risk associated with the technical or scientific risk required to develop new products, processes and services is claimable and the benefit is delivered in cash at a rate of 43.5% for start-up companies under $20m in annual revenue. 

Applications open on the 1st July for companies with a standard financial year wishing to claim their FY 2021-22 activities as per the following rates of return: 

• 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% – Non-Refundable Tax Benefit/2 tier benefit: 8.5% on eligible R&D expenditure which accounts for up to 2% of total company expenses and an additional 16.5% on eligible R&D expenditure exceeding the 2% baseline.
• Annual revenue >$50m – Company Tax Rate: 30% – Non-Refundable Tax Benefit/2 tier benefit: 8.5% on eligible R&D expenditure up to 2% of total company expenses and an additional 16.5% on eligible R&D expenditure exceeding the 2% baseline.

 
 

– Labor Government Promises New Industry Initiatives –

 
 

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.

Changes to the 2022 Research & Development Tax Incentive Schedule

Newsletter | June 8, 2022

By Shak Akhter – Senior Business Manager, Ryan Tax Services

 

Here’s what you need to know:

The ATO has recently released its Research and Development Tax Incentive Schedule (NAT 73794) for the 2022 financial year. Legislative changes introduced in the October 2020 budget have seen the introduction of changes in the way R&D entities calculate and report their R&D tax offset expenses to the ATO for the YE 30 June 2022 compared to prior years.

Consequently, this has also resulted in some changes in R&D entity’s tax return. Changes to the R&D tax schedule apply for income years commencing on or after 1 July 2021; therefore for early balancing entities with an early balancing substituted accounting period, the new R&D tax schedule applies from 1 January 2022.

Specific label changes in the new ATO’s Research and Development Tax Incentive Schedule 2022 include additional reporting for:

 

Part B – Clawback Amounts

• R&D recoupment (item 7) – total amount of all R&D recoupment amounts that relate to expenditure for which the R&D entity has claimed notional deductions under the R&D Tax Incentive,
• Assessable balancing adjustment (Item 8) – Balancing adjustment events occur when the R&D entity stops holding a depreciating asset used in R&D activities, for example, when the entity sells the asset for which the termination value may be the sales proceeds of the R&D asset,
• Total clawback (Item 9) – Additional assessable income resulting from all clawback adjustments, including Feedstock adjustment amount, R&D recoupment amount, and Assessable balancing adjustment amount,
• Deductible balancing adjustments (Item 10) – when the termination value of the R&D asset at that time was less than the asset’s adjustable value,

 

Part E – R&D Tax Offset Calculation

• Disclosure of the company tax rate (R) and
• R&D intensity calculations (A) that take into account the total R&D expenses for the entity.

 

Instructions on how to complete the 2022 R&D Tax schedule are available online. We hope that the ATO releases numerical examples and additional guidance pertaining to the calculation of R&D recoupment amount, assessable and deductable balancing adjustments, and clawbacks under these amendments. Communication and guidance from the ATO will enable R&D entities to appropriately categorize and calculate eligible R&D expenditure and reduce any potential for compliance audits.

If you would like to discuss how Ryan can help you with the R&D Tax Incentive and minimize your tax compliance burden, then get in touch with us today.

 
 

– 2022 R&D Tax Incentive Schedule Changes –

 
 

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.

Export Market Development Grants 2022

Newsletter | May 25, 2022

 
 

Austrade have just announced that the 2nd Round for making applications under the new the Export Market Development Grants (EMDG) program will soon open for a limited time.

• Opening Soon: Announcement from Austrade Imminent, watch this space

 

Under the new EMDG program, eligible SMEs are able to apply for forward grant funding over multiple years to cover eligible marketing and promotional activities.
The eligible marketing categories are:

1. Overseas Representatives
2. Marketing Consultant/Agent
3. Short trips to a foreign country
4. Short trips within Australia
5. Soliciting for business in a foreign country
6. Free Samples
7. Promotional literature and Advertising
8. Overseas Buyers
9. Overseas Patents and Trademarks

 

The new EMDG program provides 3 Tiers of grants:

• Tier 1 – first time exporter
• Tier 2 – existing exporter / existing product(s)
• Tier 3 – existing exporter undertaking a major strategic shift  – new products/ new markets 

 
 

How much can you receive?

The likely grant amounts for Round 2 will be determined once applications are closed and assessed. As the annual program funding is capped at approximately $150m the grant amount will be divided equally by the number of eligible applicants within each tier.

The grant amounts in the first round FY 2021-22 may give some guidance, assuming the application demand and funding remains stable:

• Tier 1 – up to $15,000 per financial year
• Tier 2 – up to $24,600 per financial year
• Tier 3 – up to $36,600 per financial year
• Representative bodies – up to $90,000 per financial year

 
 

Once applications are assessed eligible exporters will be offered a forward grant agreement – Tier 1 applicants will receive a 2 year agreement and Tier 2 and 3 applicants a 3 year agreement. The grant is designed to cover 50% of eligible export marketing expenses paid for from the 1st July 2022 to either the 30/6/24 for Tier 1 applicants OR up to 30/6/25 for Tier 2 and 3 applicants.

 
 

Please note: Eligible exporters are only eligible to claim EMDG grants for a maximum of 8 years so any claim history under the prior program from 1992 will be included in assessing eligibility – this includes picking up any claim history from a prior entity operated by the same owners undertaking the same type of business activities. 

 
 

Further information can be found on the Frequently Asked Questions and you can download the Guidelines at EMDG Grants Guidelines and legislation.

 
 

– Export Market Development Grants Second Round 2022 –

 
 

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.

Australian Defence Industry Grants

Newsletter | May 10, 2022

 
 

With consideration to rising tensions both globally and in the Pacific, this week we provide the latest update on the new and returning Australian Defence Industry Grants.

Given this sector is highly specialised we suggest that interested parties firstly contact the Office of Defence Industry Support (ODIS) to receive free services and advice from a ODIS Case Manager regarding your potential entry strategy into this sector. 

https://business.gov.au/odis/build-your-business-in-defence

https://www.defence.gov.au/business-industry/finding-opportunities/office-defence-industry-support

 

CONTENTS

1. Sovereign Industrial Capability Priority Grants
2. Defence Global Competitiveness Grants
3. Skilling Australia’s Defence Industry Grants

 

Sovereign Industrial Capability Priority Grants

Funding for Australian businesses to build industrial capabilities that fit with Defence’s Sovereign Industrial Capability Priorities.

Project activities can include:

• buying, leasing, constructing, installing or commissioning of capital equipment including specialist software to enhance cyber security

As they relate to the above activities, this can also include:

• design, engineering and commissioning activities
• workforce training and accreditations.

 

What do you get?

A grant of $50,000 to $1 million for up to 50% of the cost of a project that builds capabilities aligned with Defence’s Sovereign Industrial Capability Priorities. The maximum grant period is 30 months.

Grant funding is capped at $3 million in a 3-year period per recipient.

 

Who is it for?

Small to medium sized businesses with an Australian business number (ABN). The business must be a company incorporated in Australia or and incorporated trustee on behalf of a trust.

Minimum Required Contribution: 50%

For more information, click here

 
 

Defence Global Competitiveness Grants

–This grant is currently in caretaker mode, applications can still be submitted, but decisions will not be made until after the 2022 election outcome is announced. —

 
Grants to help Australian businesses invest in projects that build their defence export capability.

Project activities can include:

• buying, leasing, constructing, installing or commissioning of capital equipment including specialist software to enhance cyber security
• design, engineering and commissioning activities
• workforce training and accreditations

 

What do you get?

A grant of $24,000 to $240,000 for up to 80% of the cost of investing in projects that build export capability to build a stronger, more sustainable and globally competitive Australian defence industry. The maximum grant period is 18 months.

 

Who is it for?

Small to medium sized businesses (Less than 200 employees) with an Australian business number (ABN). The business must be a company incorporated in Australia or and incorporated trustee on behalf of a trust.

Minimum required contribution: 20%

For more information, click here

 
 

Skilling Australia’s Defence Industry Grants

–This grant is currently in caretaker mode, applications can still be submitted, but decisions will not be made until after the 2022 election outcome is announced. —

 
Skilling Australia’s Defence Industry Grants provide businesses servicing the defence sector with upskilling and training opportunities to build skills capacity and capability to meet current or future Defence needs. The grant was updated on the 4th of April, 2022 to include an additional $20.3m in funding until March 2026. 

The Skilling Australia’s Defence Industry Grants Program will provide grants to businesses over three years to help develop defence sector skills and human resources practices and training plans.

The program aims to:

• reduce barriers faced by Small and Medium Enterprises (SMEs) in the defence sector when upskilling or retraining staff
• develop skills within SMEs in the defence sector
• support SMEs in the defence sector to establish human resources practices and training plans that will build lifelong learning activities into their business

 

What do you get?

A grant between $5,000 and $500,000 to undertake various defence skills training activities.

You may apply for multiple grants or group multiple eligible activities into one application.

The funding is capped at $500,000 in a six-year period from 2020–21 to 2025–26 for:

• each eligible business; and
• each industry association which is applying for funding to train their own staff.

 

Who is it for? 

• Small and Medium Enterprises (SMEs) that currently have a Defence contract, are tendering for one, are a subcontractor to a defence prime or contracted through the Prime’s supply chain to deliver on defence projects.
• Defence Industry Associations training their own staff or facilitating training to businesses they are representing.
• Defence Industry Associations applying for funding for eligible activities for the eligible businesses they are representing.

Minimum required contribution: 20%

For more information, click here

 
 

– Ryan can assist with Australian Defence Industry 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.

Four new Federal & NSW based grants now available

Advanced Manufacturing Commercialisation Fund | Advancing Renewables Program
Going Global Export Program | Jobs Plus Program

 

Listed below are four grants currently available for Federal and NSW based businesses. These grants are in line with the 6 national priority sectors previously announced by Government, including commercialising manufacturing, advanced renewable technology, going global export, and job creation.

Index

1. Advanced Manufacturing Commercialisation Fund
2. Advancing Renewables Program
3. Going Global Export Program
4. Jobs Plus Program

 

Advanced Manufacturing Commercialisation Fund – AMGC – National

The Advanced Manufacturing Commercialisation Fund provides small to medium manufacturing enterprises with matched funding to commercialise new products and processes. Matched funding of between $100,000 and $1 million.

Applications close on 30 June 2022 or when funds are fully allocated.

The funding will soon be fully allocated, so you are encouraged to complete your application and submit it as soon as possible. This means funding will be allocated to where applications show:

• Significant job creation
• Manufacturing of innovative products in Australia
• Globally competitive products with export potential
• Sound business models with good value propositions
• Suitable finance arrangement to fund your portion of the project costs.

Funding is available for small-to-medium manufacturing enterprises undertaking projects that align with one or more of the six National Manufacturing Priorities:

• Food and Beverage
• Medical Products
• Resources Technology and Critical Minerals Processing
• Recycling and Clean Energy
• Defence
• Space

The grant will cover up to 50% of eligible project costs.

 

Advancing Renewables Program – ARENA – National

Expressions of Interest are continually open for the Advancing Renewables Program. Matched funding of between $100,000 and $50 million is available.

The program provides businesses with funding or finance to develop renewable energy technologies.

It aims to fund projects that contribute to one or more of the following outcomes:

• Reduction in the cost of renewable energy
• Increase in the value delivered by renewable energy
• Improvement in technology readiness and commercial readiness of renewable energy
• Reduction in or removal of barriers to renewable energy uptake
• Increase in skills, capacity, and knowledge relevant to renewable energy.

 

Going Global Export Program – NSW only

The 2021-22 NSW Going Global Export Program supports eligible NSW businesses to reach new customers in new international markets. It supports businesses in the following sectors:

• Food and Beverage, Agri-Food, Processed Food
• Health and Medtech
• Technology

The program provides export coaching, tailored workshops and business matching with international customers. It is suitable for those that are seeking global sales for the first time, as well as those currently exporting and looking to diversify into new markets. It offers participants:

• an understanding of market dynamics
• practical approaches for doing business in the target market
• opportunities to identify and engage with new customers in the target market
• opportunities for networking with global businesses and entrepreneurs
• opportunities for global promotion
• opportunities for peer interaction with the businesses in your cohort

The 2–6 month intensive engagement program has been developed to give businesses a richer understanding of preferred high growth export markets, tailored for specific industry-sectors

 

Jobs Plus Program – NSW only

The Jobs Plus Program is open until 30 June 2022 and new staff hires must start before 31 December 2022.

The program supports Australian and international businesses to start or expand their operations in NSW. Support is available to help reduce the costs and financial risks of growing a business or moving its operations to NSW.

To be eligible for the program, Australian businesses must currently employ at least 20 workers and overseas businesses must employ at least 80 workers.

Proponents seeking assistance through the program will be eligible for a variety of support levers based on the number of jobs created, including:

• Jobs Plus Concierge Service
• Payroll tax relief for up to 4 years for every new job created where a business has created at least 30 net new jobs
• Subsidised training package rebates
• Enabling infrastructure rebates
• Access to subsidised, short-term government accommodation and spaces
• Assistance with the NSW planning approvals.

All businesses must be able to create at least 30 net new full-time equivalent (FTE) jobs in NSW before 30 June 2024. Further conditions apply.

 
 

– Are these four new federal and NSW based grants relevant for your business? –

Contact TCF today for a consultation

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.

Final Reminder for Application Deadline
May 3rd 2022

R&D Tax Incentive – applications to register R&D activities must be lodged by Tuesday 3rd May

It is important to note that the 3rd May lodgement deadline to register your 20/21 financial year R&D activities is looming fast for companies with a standard 30th June reporting year-end. This newsletter serves as your May 2022 R&D lodgement final reminder of application deadline. Other entities with a substituted accounting period have 10 months from the completion of their financial year to register.

Index

1. Rates | Record Keeping Tips | Deadline Information
2. Export Market Development Grant Receives Regional-Only Funding
3. NSW Export Assistance Grant

 

The new R&D Tax Incentive rates of return are:

FY 2020-21

• Annual revenue <$20m – Company Tax Rate: 26% – Refundable Tax Benefit: 43.5% (if matched by tax losses) or 17.5% (when trading in profit)
• Annual revenue $20m-$50m – Company Tax Rate: 26% – Non-Refundable Tax Offset: 12.5%
• Annual revenue >$50m – Company Tax Rate: 30% – Non-Refundable Tax Offset: 8.5%

 

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 an additional 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 an additional 16.5% on eligible R&D expenditure exceeding the 2% baseline.

 

End of Financial year R&D Tax housekeeping tips:

• Pay your associated party R&D fees by 30th June each year – if an entity or contractor is associated in any way with the R&D entity ( i.e. shareholder, director, staff, or associated entity) their fees for R&D services must be paid for by the 30th June in the year of the R&D activity otherwise the ATO will not allow the claimant to drawdown the tax benefit when the tax return is lodged, instead, the unpaid associated party expense must be carried forward in the tax return and only realised when the expense is paid.
• Pay your R&D staff superannuation payments by the 30th June each year – to be eligible to claim the superannuation costs relating to R&D staff requires the superannuation to be paid on or before the end of the financial year. Similarly, late compulsory superannuation payments cannot be claimed in the financial year they apply but can be claimed in the following year when paid.

 

R&D Tax record-keeping tips:

It is also important to note that the R&D Tax Incentive is a self-assessment program requiring claimants to maintain contemporaneous records that track the progress of their R&D activities and quantify the costs associated with the activities being claimed. If suitable records are not maintained claimants run the risk of having their prior year/s claims rejected if audited and forced to pay back the benefits received plus interest and penalties. Listed below are the types of records that would be appropriate to meet compliance requirements:

• populating an annual R&D project plan which identifies your eligible core and supporting activities
• writing monthly technical reports which report on the conduct of your R&D activities
• completing weekly time-sheets for your R&D staff against eligible activities to calculate the claimable apportionment of time
• taking photos evidencing stages of prototype work and;
• recording technical meetings
• tracking the material costs associated with each trial

 

Export Market Development Grant (EMDG)

Receives additional funding in May budget but only for regional companies

Under the new EMDG program, eligible SMEs are able to apply for forward grant funding over multiple years to cover eligible marketing and promotional activities.

The oversubscribed and underfunded Export Market Development Grants scheme has been given a $100 million funding boost over the next two years, but this extra cash will only be accessible for regional companies.

The Federal budget, unveiled by Treasurer Josh Frydenberg on Tuesday night, included $100 million over two years for the Export Market Development Grants (EMDG) through the Regional Accelerator Program.

This funding will only be for regional-based companies looking to access the scheme, which provides reimbursements of up to 50 per cent for eligible export promotion expenses.

The funding will come from the Department of Regional Development rather than the Department of Foreign Affairs and Trade (DFAT), which administers the scheme.

DFAT’s funding for the EMDGs will remain steady at $157 million per year over the forward estimates, but the regional boost effectively ups this to $207 million in 2022-23 and 2023-24, before it drops back down to the ongoing amount.

Round 2 applications are expected to open soon which will cover eligible export marketing activities from the 1st July 2022.

Grant agreements for Tier 2 and 3 applicants who applied for the first Round (commencing 1st July 2021) will be issued shortly.

 

NSW Export Assistance Grant

If you are an exporting business, or if you were exporting goods or services before the impacts of COVID-19, bushfires or drought, you may be eligible for an export assistance grant of up to $10,000.
 

Eligible Activities

This grant helps eligible export businesses in NSW access global markets. Funds can be used for:

• marketing materials
• website internationalisation
• pivoting to online delivery (for example, converting face-to-face training content to online content for international audiences)
• e-commerce development
• market research
• international tradeshow and trade missions
• inbound business support
• costs to support compliance/localisation of products for export
• costs to protect business in international markets.

 

Available Funding

This grant will be provided as reimbursement of 50% of eligible expenses, up to a maximum of $10,000 per eligible business, for expenses already paid since 1 January 2020.

 

How to Apply

You can submit either one application up to the maximum of $10,000 or multiple applications of a minimum of $2,000 per each application, totaling a maximum of $10,000.

Applications close at 11:59pm on 30 June 2022 or when the allocated funding is exhausted.

 

Eligibility

To be eligible for this grant, you must:

• be based in NSW
• be currently exporting, or were exporting prior to the impacts of COVID-19, bushfires or drought
• employ a minimum of 3 full-time equivalent workers at the time of application
• own the goods/services to be exported, or be able to provide documented evidence that you are the agreed export supplier
• produce the goods/services to be exported in Australia, or be able to provide documented evidence that the business provides substantial value to NSW
• be an exporting business with an annual turnover of:
  • up to $100 million, or
  • greater than $100 million that can demonstrate export turnover has declined by more than 30% in the 2019–20 financial year and have an intention to re-establish your export business in your established markets and/or diversify into new markets.

Click here to find out more

– Final Reminder – application deadline looming fast –

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.

Screen Australia drops a $150k Games Expansion Pack Grant for small and medium game developers

 

A Screen Australia initiative to help Australian game studios increase the ambition and quality of their digital games, and to transition into businesses of scale that can better compete in the global market. Screen Australia will provide production funding to successful applicants in the form of a grant towards the financing of their game. This games expansion pack grant is aimed at games with development budgets below $500,000.

The initiative will run for the 2021-22 and 2022-23 financial years.

Higher budget games are likely to be able to receive Australian Government support through the announced Digital Games Tax Offset, intended to be operational from 1 July 2022.

CONTENTS

1. What?
2. Who?
3. How?
4. Assessment Criteria
5. Terms of Funding

 

What?

Applicants can apply for funding for a digital game with a budget below $500,000. Applicants can also apply for funding for a slate of two or more games at that budget level provided all proposed games are at a stage where they can meet the proof-of-concept requirements set out below.

Screen Australia’s total support will not exceed $150,000 per application in respect of a game or games. Applications are limited to one per company for this current round.

Games can be for any video game platform including PC, mobile and console. The primary intention of the Games Expansion Pack Grant is to fund the creation of new titles. However, applications for live ops development of existing games are eligible. Games with co-financing from commercial partners or state agencies (including state based rebates) are eligible to apply.

The following games are ineligible for support through the initiative:

• games not intended for supply to the general public (eg. a game to be used by a company for training purposes or by an institution, or a game limited to one or a small number of locations);
• games which are substantially advertising or promotions;
• gambling or gambling simulations; and
• games that in the reasonable opinion of Screen Australia may have difficulties receiving an Australian classification.

The initiative will preference original game ideas, rather than licensed intellectual property.
Applications for XR projects which are not a ‘game’ should not apply to Games: Expansion Pack. Such projects may be eligible for funding under Screen Australia’s Online Production fund.

 

Who?

The Games: Expansion Pack funding for 2021-22 is targeted at emerging or small to medium independent game developers.

Companies should fit within the following criteria:

• private company (not listed on the ASX) and it is not majority owned or controlled by an overseas company
• Student teams are not eligible to apply and should seek funding and other support offered by their educational providers.
• Applicants need to be a company
• the game must predominantly be developed in Australia, under the key creative control of Australians or Australian residents, to be considered sufficiently Australian to be eligible for funding

 

How?

Applications for the 2021-22 round close 5pm Thursday 28th April 2022 and can be made through the Screen Australia application portal. Applications consist of the materials requested in the application form and a proof-of-concept in the form of:

• ideally, a playable prototype of the game(s); or
• an animated gameplay trailer for the game(s).
• a video pitch of no more than 3 minutes outlining the vision for the game(s) and the impact of a successful release on the applicant’s business;
• a development plan, including schedule and milestones;
• a financing plan and budget to completion and release (in the prescribed format);
• details of existing financing deals (such as grant agreements or deal memos); and
• a marketing and release plan no fewer than 3 pages long.

Applicants can also provide examples of past games or credits that they consider will help the assessment of the application. If an applicant and/or team has access requirements that make it difficult to submit their application, please email Games and we will make arrangements to assist.

 

Assessment Criteria

Each application will be assessed on the below criteria:

• the level of creativity and entertainment value of the game(s);
• the viability of the budget and development and financing plans to enable the game(s) to be developed to release;
• the viability of the marketing and release plan(s); and
• the potential for the game(s) to contribute to the scale and sustainability of the applicant.

Applications will be assessed by Screen Australia’s Online Department. Screen Australia may engage external assessors to assist it with some applications. If external assessors are used, Screen Australia will provide an opportunity to advise of any conflicts of interest.
Applicants will be notified of the outcome of their submission by mid-June 2022.

 

Terms of Funding

Screen Australia’s funding will be provided as a grant. It is not repayable to Screen Australia from the receipts of the game(s). The funding agreement will set out milestones appropriate to the game’s development plan. Payments will be made on satisfactory achievement of each milestone.

At least 90% of the grant must be spent on development expenditure of the game(s) in Australia. Successful applicants can elect to allocate up to 10% of the grant amount to marketing activities for the game, including attending conferences and festivals to promote the game. Applicants will need to provide a satisfactory acquittal of the grant against the development expenditure.

Screen Australia acknowledges and appreciates the efforts that go into applications, but given the anticipated volume of applications, it will not be able to provide detailed individual feedback on each application.
For any enquiries, please contact the Screen Australia Program Operations team on 1800 507 901 or email Games.

 
 

Get your applications to the Games Expansion Pack Grant in now, time is limited.

 
 

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.