What is the R&D Tax Incentive?
The R&D Tax Incentive is designed to encourage small and large businesses to conduct R&D that may not have otherwise done so by providing cash rebates and tax liability reductions.
Last tax year almost 15,000 Australian companies registered for R&D tax incentive with a budget of about $3.0 billion delivered in rebates. Treadstone is one of Australia’s leading R&D consulting firms provide a full-service helping businesses maximise their R&D tax rebates.
The ATO and Austrade administer the incentive jointly across a wide range of industries and activities to promote competitiveness and productivity in the Australian economy.
How much can I get?
R&D tax rates for FY21 (expenses incurred financial year 2020-21) remain as per prior years.
Note: FY21 company tax rates for businesses with turnover of less than $50m will decrease from 26.5% to 25%. Company Tax rates for over $50m turnover remain at 30%.
- Provides 43.5% refundable tax offset for companies with an aggregated turnover of less than $20m.
- Provides a 38.5% tax offset to eligible entities for companies with over $20m turnover.
- A $100m R&D expenditure threshold was introduced in 2014.
Changes to the R&D Tax rebate rates and maximum apply for expenses incurred after 1st July 2021. See Link to changes in R&D tax rates FY22
- Companies in a loss position can apply and receive a cash rebate.
- You must register your activities within 10 months of the end of your company financial year (usually 30th April) to be able to claim.
- Documentation of test results must be kept. i.e. emails, results, external consultation, project documentation and software repositories
You will need to be able show that you own the IP generate by your R&D and have kept records of tests and expenses that meet the definitions in Div 355 of the Income Tax Assessment Act 1997. See our section on basic record keeping for R&D tax.
How to apply:
Registrations for R&D Tax are now made through the AusIndustry R&D tax portal. This will require you to logon using MyGOVID access.
How can we help you?
Treadstone has been helping clients with R&D tax incentive since 2009. Working with us means you get the maximum rebate you are entitled to with the minimum risk and effort. We provide a full R&D tax service starting with documentation of the technical activities and reviewing all eligible aspects of your R&D activities, registering with AusIndustry, preparing your R&D tax schedule with the ATO and providing support to resolve any audit or compliance issues post registration.
We also provide quarterly reporting and compliance reviews prior to registration for speedy applications. To ensure you get a quick result contact us before your end of financial year.
You must use a registered tax agent if you want a consultant to complete your R&D Tax Incentive registration. Treadstone is a registered tax agent for R&D tax.
R&D bridging finance available
If you need your rebate in a hurry we can facilitate an R&D rebate loan to put money in your pocket while the ATO process your return. If you want to borrow funds to accelerate your R&D for up to 12 months in advance we can facilitate your loan. Call us to find out more.
ESIC 100 point checklist for early stage investor tax offset
For an investor to be entitled to the early stage investor tax incentives, the company must qualify as an early stage innovation company (ESIC) immediately after the new shares are issued to the investor. One way to do this is through the ESIC 100 point checklist. Tax incentives include a 20% non-refundable investor tax offset and a CGT benefit when shares are disposed of between 1 -10 years.
To find out more please contact us on Melb: (03) 9008 5937, Syd: (02) 8378 2520 or email us.