New R&D Tax Registration Form:
The R&D Tax Incentive program has a new registration form. From 5th July 2021 the PDF smart form will no longer be available. The new form is a portal on the AusIndustry website and will require you to sign in with your MyGovID.
If you are working with a qualified R&D Tax Consultant you will need to give them permission to use your portal. The process of authorising a consultant is an extra step from usual but will mean that you can see the registration form before submitting.
Rates and rules for FY21:
There are no changes to the FY21 rates or rules with 43.5% rebates for under $20m aggregated turnover businesses and 38.5% non-refundable rebates for over $20m turnover.
Changes to the program announced in the October 2020 Budget, will apply to expenses incurred from 1st July 2021. These changes will mean that the rebate is pegged to 18.5% above the company tax rate (25%) for FY22.
General information about the R&D tax incentive program:
The R&D Tax Incentive provides a 43.5 per cent refundable tax credit to companies with an aggregated turnover of less than $20 million and a 38.5 per cent non-refundable offset to all others. Budget changes to these rates will apply to the following year (FY22).
Due to an add back of R&D expenditure, only businesses with current or carried forward losses will receive the full rebate.
To be eligible you must:
- be a company incorporated in Australia, or a foreign owned with a permanent establishment in Australia? (Trusts are generally not eligible)
- have conducted activities during the last financial year that involved or supported Core R&D activities*
- have appropriate records and evidence of conducting eligible R&D activities to substantiate your claim
- have undertaken your core R&D activities in Australia**
- have conducted the activities on your own behalf which usually means you own the IP
- have over $20,000 of expenses in the year of claim.
*Core Activities are defined as activities whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience but can only be determined by applying a systematic progression of work that:
- -is based on principles of established science; and
- -proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions;
-and that are conducted for the purpose of generating new knowledge (including new knowledge in the form of new or improved products, processes, materials, devices or services).
** Overseas R&D activities can only be claimed if you obtain an overseas finding in the year the expense is incurred.
How to claim:
Making a claim is a two-stage process:
- Apply for registration through AusIndustry within 10 months after the end of the financial year (i.e. by 30 April for 30 June end of financial year companies).
- Calculate your eligible expenses and fill out the R&D Tax Schedule provided by the ATO. Submit this at the same time as you submit your company tax return. Treadstone will work with your accountant to ensure your claim is maximised and correctly submitted.
Pre-registration will be available under the process of Advanced Findings. An advance finding is intended to give certainty as to the eligibility of R&D activities under the R&D Tax Incentive. However, an advance finding is not a pre-condition of registration nor does it replace registration. Companies will still be required to register their activities at the end of each income year that the activity was conducted.
Companies who are confident that their activities are eligible do not need to apply for an Advanced Finding. If you are unsure a qualified R&D Tax Consultant should be capable of providing advice.
Using R&D Tax Consultants:
While the R&D Tax Incentive is open to all businesses to self submit, there are many advantages in using a qualified R&D Tax Consultant. Advantages include, maximising your claim value, minimising audit risk, reducing your time spend on tasks that require detailed analysis and understanding of legislation, access to other grant programs and peace of mind. Always check your R&D tax agent is a listed tax agent and you can find them on the Tax Practitioners Board website.
We provide expert advice and deliver professional grant applications. Allow us to manage this aspect of your business while you stay focussed on your core business.
To see if you may be eligible for R&D Tax Incentive, Export Market Development Grants (EMDG), or Innovation grants please follow the links below:
Treadstone is an experienced, outcome focused business with a proven track record of success since 2008.
Call us to find out what other grants you may be eligible for on 03 9008 5937 or email.