National Innovation & Science Agenda Announced

Newsletter | December 2015

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.

Exciting times loom ahead for tech founders, innovators and inventors – new policy settings for Australian innovation stakeholders

Prime Minister’s National Innovation and Science agenda released

Prime Minister Malcolm Turnbull unveiled his much anticipated Innovation agenda in Canberra last week. The purpose of the $1.1 billion package is to establish policy settings that will:

• encourage and reward investment in new ideas and solutions
• foster greater collaboration between the business community, universities and scientific institutions
• facilitate a greater emphasis on STEM skills within our education system
• transform Government so it becomes an exemplar of innovation

As the funding for this package does not commence until 1st July 2016 or later, it is well worth noting that the devil will be in the detail and not until we see the Customer guidelines and Application forms will we know the mechanism and timing relative to each initiative.

Please also keep in mind that a review of the current R&D Tax Incentive is also underway with findings to be released after the new independent body named Innovation and Science Australia (ISA) is formed on the 1st July 2016.

The package includes:

1. Tax Incentives for early stage investors

Tax Incentives for early stage investors who support innovative start-ups incorporated over the past 3 years which are not listed on the stock exchange with expenditure and income of less than $1m and $200,000 respectively in the previous income year:

• a 20 per cent non-refundable tax offset on investments, capped at $200,000 per investor per year
• a 10 year exemption on capital gains tax, providing investments are held for three years.

2. Early Stage Venture Capital Limited partnerships

Tax Incentives to attract more investment in Early Stage Venture Capital Limited partnerships (ELVCLP) – investment partners will receive a 10% non-refundable tax offset on capital invested during the year.

3. Increasing access to company losses

Increasing access to company losses by replacing the ‘same business test’ with a more flexible ‘predominantly similar business test’, so that start ups companies will be able to pivot their projects and enter into new business activities and transactions without losing tax losses incurred.

4. Intangible asset depreciation

Intangible asset depreciation will provide a new option to self-assess the tax effective life of acquired intangible assets that are currently fixed by statute. This will better align the tax effective life with the true life of the assets, meaning the same tax treatment will be available for acquired intangible assets as is available for other types of assets.

5. CSIRO Innovation Fund

The new CSIRO Innovation Fund will have two parts:

• an early stage innovation fund of about $200 million to support co-investment in new spin-out/startup companies based on research based products and services created by Australian research institutions
• a $20 million expansion of CSIRO’s accelerator programme to include other publicly funded research organisations to more rapidly prepare their research for commercial purposes.

6. Biomedical Translation Fund

Biomedical Translation Fund, the Government will establish a new $250 million independent body will invest in promising biomedical discoveries and assist in their commercialisation.

7. Incubator Support Programme

The new $8 million Incubator support programme will become a new component of the Entreprenuer’s Infrastructure programme and offer competitive matching funding to:

• support development of new incubators and accelerators in regions or sectors with high innovation potential
• boost the effectiveness of high performance incubators, including support to expand their services and engage a Commercialisation Advisor to facilitate access to other government services and programmes

8. Employee Share Schemes

In addition to earlier reforms to the taxing point on employee share schemes the Innovation statement also announced limiting the requirement for disclosure statements given to employees to be made available to the public.

9. Building world class national research infrastructure

Building world class national research infrastructure – the government will invest $2.3 billion over the next 10 years in cutting edge national research infrastructure:

• $1.5 billion for the National Collaborative Research infrastructure Strategy (NCRIS)
• $520 million for the Australian Synchrotron
• $294 million for Australia’s commitment to Square Kilometre Array (SKA)

10. Research block grants

Research block grants will provide further support for driving greater collaboration through university- industry collaboration to give more emphasis to success in industry engagement and research quality by replacing the existing six research block grants with 2 streamlined programmes:

1. Research Support Programme (RSP) will provide $885 million in 2017 to Australian universities as a flexible funding stream to support the systemic costs of research
2. Research Training Programme (RTP) will provide $948 million in 2017 to support training of the next generation of researchers and innovators

11. Australia’s Global innovation strategy

Under Australia’s Global innovation strategy the Government will invest $36 million to improve Australia’s innovation and science collaboration by:

• establishing five “landing pads” in Silicon Valley, Tel Aviv and three other locations to support entrepreneurial Australians with $11m in funding
• providing $22 million seed funding to assist Australian collaborations with international research-industry clusters
• investing $3 million in reducing barriers to regional collaboration and promoting an open market approach

12. Cyber security growth centre

Establishing an industry-led Cyber security growth centre with funding of $30 million through to 2019-20 to create business opportunities for Australia’s cyber security industry

13. Innovation connections programme

The new Innovation connections programme will deliver $18 million in funding to expand and relaunch the existing Research Connections scheme to:

• provide additional facilitators so that more businesses can access Australia’s innovation infrastructure, particularly in regional Australia
• make matched grants available to support graduate and postgraduate researchers being placed in businesses
• make matched grants available to support business researchers to be placed in a publicly-funded research organisation
• identify opportunities to access research and development and testing facilities and develop specialised training options by working more closely with the vocational education and training sector

14. $26m to advance quantum computing technology

$26m to advance quantum computing technology in Australia and fund the development of a silicon quantum integrated circuit, the first step in developing a practical quantum computing system or super computer which will have the potential to solve problems in minutes that would take conventional computers centuries to work out.

15. Australian Research Councils (ARC) linkage projects scheme

From 1st July 2016 the Australian Research Councils (ARC) linkage projects scheme will be open to continuous applications and decision making will be fast tracked.

16. Inspiring a Nation of Scientists Initiative

Under the inspiring a nation of scientists initiative the Government will invest $48 million over 5 years to encourage all Australians, from pre-schoolers to the broader community to engage with science, technology, engineering and mathematics (STEM) AND under the equipping students to create and use digital technologies initiative the Government will invest $51 million over 5 years to embrace the digital age and better prepare themselves for the jobs of the future.

17. Expanding opportunities for women in STEM

Expanding opportunities for women in science, technology, engineering and mathematics (STEM) – the Government will invest $13 million over 5 years to encourage women to embark on, and remain in, STEM related careers through 3 initiatives.

18. Supporting Innovation through visas

Supporting Innovation through visas – the Government will enhance the visa system to attract the best and brightest entrepreneurial talent and skills to Australia by creating pathways to permanent residency for people with STEM and ICT qualifications and by creating a new Entrepreneur Visa to attract overseas based entrepreneurs with innovative ideas who have financial backing.

19. Data61 – creating Australia’s Digital and Data productivity Network

The government will invest $75 million to merge the National ICT Australia Ltd and the Commonwealth and industrial Research Organisation’s digital research unit to form one of the largest digital research teams in the world to:

• use data analytics to connect disparate government datasets and publicly release them on open data platforms
• improve industry cybersecurity and develop new cybersecurity architectures
• build a Data Research Network to link business with data researchers
• deliver data analytics training to improve data literacy in Australian businesses

20. Transforming procurement

Transforming procurement – a $19 million Business research and innovation initiative aims to transform Government procurement. The Government will pilot a series of challenges which will operate in 3 stages:

• nominate 5 national policy and service challenges
• invite businesses to submit proposals to address the 5 challenges with the winners receiving $100,000 to test their ideas over a 3 – 6 month development cycle
• provide an additional grant of up to $1m to the most successful applicants to further develop a prototype or proof of concept over the next 18 months.

21. Establish a Digital marketplace for information technology procurement

Establish a Digital marketplace for information technology procurement to make it easier for SME’s to do business with Government. Based upon a successful UK model, the online directory will provide a catalogue of modular products and services so that ICT suppliers and government buyers can easily search, identify and procure best value options.

22. Establish a new independent body named Innovation and Science Australia (ISA)

Establish a new independent body named Innovation and Science Australia (ISA) to provide strategic advice to the Government on all science, research and innovation matters as currently the Government’s $9.7 billion investment in R&D is fragmented across 15 portfolios.

23. Promoting innovation through publishing and sharing public data

Promoting innovation through publishing and sharing public data –the Government will release more non sensitive public data for private sector innovation and use public data to improve service delivery and inform policy development.

24. Innovation and Science in agriculture

Innovation and Science in agriculture – Agricultural researchers will be well placed to take advantage of the sharpened incentives for university engagement with research end users.

• The Global Innovation Strategy will support Australian businesses and researchers to work with international consortia and will provide seed funding for collaborative science workshops with regional economies on shared challenges, such as food and bio-security.
• The Incubator Support Programme will focus on regional areas and sectors with high innovation potential, such as those identified as an industry Growth Centre or a Science and Research Priority.
• This agenda complements existing efforts to build an innovative and profitable agriculture sector as follows:
  • This agenda complements existing efforts to build an innovative and profitable agriculture sector as follows:
  • The Government and industry are projected to fund around $5.5 billion in collaborative research, development and extension in agriculture through the sector based Rural Research and Development Corporations over the next 10 years.
  • The Government has also doubled the scope of the Rural R&D for Profit programme, providing $200 million to improve farm-gate returns, adoption of research outcomes and research collaboration.
  • The Food and Agribusiness Growth Centre, food and soil related Science and Research Priorities and our research organisations like CSIRO and Cooperative Research Centres also help to advance our agricultural sector.

25. Innovation in our regions

Innovation in our regions – the Incubator Support Programme will focus on regional areas and sectors with high innovation potential, such as those identified as an industry growth centre or a Science and Research priority. A number of other measures, including further funding for regional universities and funding to inspire students and the community with digital technologies and STEM will all create more opportunities for our regions.

This agenda complements existing efforts on regional Australia as follows:

• The Government is supporting Indigenous businesses and entrepreneurs through $30 million each year in direct support for enterprises, fostering cutting edge innovation by Indigenous entrepreneurs.
• The Australian Government’s National Stronger Regions Fund will provide funding of $1 billion over five years, commencing in 2015–16, to fund priority infrastructure in regional communities.

26. Making it easier to access crowd-sourced equity funding

Making it easier to access crowd-sourced equity funding by introducing new laws that will enable unlisted companies to raise up to $5m a year in equity funds online. It will be available to unlisted Australian public companies with turnover and gross assets of less than $5m and limit the amount of investment per individual to $10,000 per company, per year.

To view the full National Innovation & Science Agenda please click here and to view the Fact sheets with further information on each of the 26 initiatives outlined in this newsletter please click here

If you would like to discuss the Agenda or other forms of Government assistance programs please call Gerry Frittmann, Managing Director of TCF Services on (02) 8219 4900 or visit www.tcf.net.au

The team at TCF Services also wish you a very Merry Christmas and a safe and happy New Year.

– TCF Outlines National Innovation & Science Agenda –

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.

–TCF Bulletin–
Last year of BIC Scheme confirmed

Newsletter | July 2015

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.

We can officially confirm that the last year of the BIC scheme has been reinstated and registered companies can now lodge claims up to the end of February 2016.

The Building Innovative Capability (BIC) scheme was a $112.5 million dollar scheme introduced to grow the manufacturing and textiles industries in Australia. This is in a similar way to the Textiles, Clothing and Footwear scheme that made TCF Services the leading service provider it is today. Programs change over time, but our service commitment remains the same.

Our BIC team of consultants have commenced working with our clients to prepare and lodge claims, if you have any questions please feel free to call me or your designated TCF Services consultant.

Gerry Frittmann
Managing Director, TCF Services Pty Ltd

– Last year of BIC Scheme confirmed –

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.

Reinstatement of 14/15 year BIC claims now looks certain

Newsletter | June 2015

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.

Further to the letter that AusIndustry sent all BIC claimants a few weeks ago I can now report that the Government has not reintroduced the Bill to Senate to cut the last year of the scheme as it does not have the support of the minor parties.

Therefore we can safely assume that with only 5 days to go so it won’t happen and BIC claimants will be happy to have their 14/15 claims back on the table.

Our BIC consultants are now working hard to visit all clients to prepare and lodge your 14/15 claims.

Any new claimants may still register by the 30th June 2015.

If you have any questions please contact Gerry Frittmann, Managing Director TCF Services gerry@tcf.net.au

– BIC claimants advised to contact us for claim assistance –

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.

End of Financial Year Reminders 2015

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.

Payments to associated parties must be paid by June 30th.

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 2015. 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 end of financial year, June 30th

If an R&D entity requires a legally binding ruling to ensure that its 2014-2015 financial year R&D activities are in fact eligible, it must seek approval by lodging an Advance finding application by the 30th of June 2015. 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 2014-2015 financial year, it must seek approval to do so by lodging an Overseas finding application by the 30th of June 2015. 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

– End of Financial Year Reminders –

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.

TCF Services enhances R&D Tax Incentive Prepayment

Are you eligible for R&D Tax Incentive prepayment services?

Only eligible R&D Tax Incentive claimants who are entitled to receive a 45% “refundable tax offset” are eligible to receive a prepayment against current or future R&D tax benefits.

Drawdown on your current 13/14 year claim

If you need funds now and you have yet to lodge your 13/14 R&D Tax claim then talk to us on how we can prepay up to 80% of your benefit now rather than you waiting up to 2 – 3 months for the preparation, registration and processing period involved.

Drawdown on quarterly or half yearly 14/15 year R&D expenses

Enter into a funding agreement and we will provide you with up to 80% of your 45% benefit as you incur R&D costs on a quarterly or half yearly basis thus freeing up capital 6 – 9 months earlier.

Accelerate your funding runway without VC support

Enter into a funding agreement that effectively tops up your annual R&D budget against a pre-determined R&D Plan of annual activities. Approved applicants who have a “positive advanced finding” from AusIndustry are able to receive 60% on top of the R&D funds they committed on the basis that the prepayment loan will also be used to accelerate and support additional R&D activities.

Successful applicants can take advantage of a greater quantum of funding 12 – 15 months earlier than they would have otherwise expected allowing the pathway to commercialisation to be accelerated knowing that the resultant R&D benefit based on a larger annual R&D spend will effectively repay the full R&D prepayment thus providing a win win situation for all concerned.

Contact Us

If you would like to discuss this offer in more detail please contact Gerry Frittmann (Managing Director) gerry@tcf.net.au or David Tonkin (Director) david@tcf.net.au at TCF Services.

– Confirm your R&D Tax Incentive Prepayment Eligibility –

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.

Update to Proposed BIC Scheme Cuts

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 many letters sent by the Fashion and Clothing sector opposing cuts to the last year of the BIC scheme, we can confidently report that the 2 major parties in Opposition (Labor and Greens) and some of the independents have supported the industry by blocking the amendment bill from gaining passage through the Senate.

Abbott has therefore announced that he will patiently continue to negotiate with all of the independent and minor party Senators on each issue to allow passage of the measures originally announced on Budget night and he has until May 2015 to do so.

Pivotal to the outcome of the BIC scheme is the Palmer Party (PUP) who hold 3 Senate seats and in effect control the passage of most of the measures for which the Government is seeking Senate approval.

At this stage PUP have not confirmed or denied any position on the BIC issue as they are more interested in the bigger ticket issues like the $7 medical co-payment and cuts to the mining tax.

I therefore suggest that the BIC scheme will become a bargaining chip which could go either way as the timeline and cost is very small in the larger economic scheme of things. I will keep you informed as and when any further news is worthwhile sharing.

– Update to Proposed BIC Scheme Cuts –

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.

Senate sees BIC Funding Showdown

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.

Legislation to cut the last year from the Clothing and Household Textile Building Innovative Capability (BIC) scheme 2010 faces a battle in the Senate after the ALP and Greens opposed it in the House of Representatives today.

The Opposition criticised the Government’s Budget decision to close BIC one year earlier than originally intended as generating too much pain for too little gain.

The Government attacked the Opposition by claiming, among other things, that the time had come to end corporate welfare and that not one group or company had come forward in support of the Opposition’s position.

The Opposition, on the other hand, gave at least two specific examples of TCF businesses that would be adversely affected by the proposed changes to BIC explaining that the changes, if they went ahead, would undermine significant investment plans of TCF businesses who had acted in good faith in investing in innovation in expectation that BIC would continue until 2014–15.

TCF Services will continue to monitor the passage of the amending legislation and provide you with more details as they become available.

In the interim, I encourage all of our BIC clients to contact me if they wish to write to the Industry Minister, the Opposition Shadow Minister, the Greens and Independents to voice your concerns and attempt to garner the support required so that the Senate does not support the cut before its too late.

– Battle to maintain BIC scheme funding –

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.

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.