The Research & Development (R&D) Taxation Concession and the recently announced R&D Tax Incentive provide a significant and valuable incentive for eligible companies who expend funds on research and development.
The R&D Tax Concession deals with R&D expenditures in the 2010-11 year and the R&D Tax Incentive will support expenditure in the 2011-12 year and beyond.
Both of these programs serve to substantially reduce company tax and, in certain circumstances, can provide a sizable tax refund.
R&D Tax incentives operate as entitlement programs, meaning that an applicant need only demonstrate eligibility to be “entitled” to the benefit.
At Hayes Knight NT we consider R&D Tax to be a highly specialised but valuable and generous incentive for our clients to look in to. Eligible R&D expenditure can include wages and salaries, overheads apportioned to R&D activities, materials, direct contract expenditure, design costs, depreciation of R&D plant, finance and capital raising costs, to name but a few.
Our services include:
- Free, anonymous, accurate, eligibility self-assessment
- R&D strategy and planning
- R&D project finance and capital raising
- R&D project management tools
- R&D Tax registration form development and lodgement
- R&D Tax cost schedule preparation
- R&D Tax compliance review support
Our service and advisory methodology is focused on providing you with the tools and skills required to manage your R&D Tax oriented projects making it an easier, more efficient and more compliant process
To determine if you are eligible for R&D Tax Concessions for your 2010-11 projects, or R&D Tax Incentives for your 2011-12 projects, CLICK HERE to undertake a free, anonymous and accurate self assessment test.
At the end of the self assessment, please complete the form and press send. We will then receive your details and results by email and be better equipped to discuss your eligibility and develop a more focussed service package for you.
About R&D Taxation Concession & Incentive
R&D Tax Concession (2010-11 Financial Year)
The R&D Tax Concession is designed to increase businesses investment in innovation and encourage Australian industry to undertake research and development activities.
The 125% tax concession for investment in R&D, entitles companies to claim a concessional deduction in their annual tax returns of up to 125% of qualifying expenditure incurred on the R&D activities in Australia. This equates to a $7,500 tax reduction for every $100,000 spent on R&D activities.
In situations where an eligible company is a tax loss situation, the R&D Tax Concession can enable them to ‘cash out’ any tax losses, and obtain a tax offset or refund equivalent to their R&D Tax Concession entitlements, when their tax liabilities are assessed. This equates to a $37,500 tax reduction for every $100,000 spent on R&D activities if you have sufficient tax losses to take full advantage of the R&D Tax Offset. In certain circumstances, the R&D Tax Concession can be up to 175%, depending on the historical R&D expenditure and claim lodgement history.
The R&D Tax Concession is claimed via the company tax return and requires annual registration within 10 months from the end of a company’s financial year. Thus, for company’s operating on a July-June year, the lodgement deadline is April 30 in the following year.
R&D Tax Incentive
The R&D Tax Incentive applies to research and development activities and expenditure in income years commencing on or after 1 July 2011 and provides a targeted tax offset designed to encourage more companies to engage in research and development in Australia.
The R&D Tax Incentive has two core components:
- a 45 per cent refundable tax offset (equivalent to a 150 per cent deduction) to eligible entities with an aggregated turnover of less than $20 million per annum
- a non-refundable 40 per cent tax offset (equivalent to 133 per cent deduction) to all other eligible entities.
Although the potential benefits are greater, there is a new definition of R&D and a requirement for record keeping.
The R&D Tax Incentive is a “new” program that requires registrants to delineate between CORE activities and SUPPORTING activities in R&D projects and there is a new dominant purpose test for supporting activities.
The R&D Tax Incentive is a rules based program and Hayes Knight possesses the knowledge, systems and tools to assist innovative businesses make use of this significant incentive.
To enable Hayes Knight NT to provide a market leading service in this field we have formed a collaboration with YOUR R&D Tax, a South Australian expert in R&D Tax services with over 20 years of experience in this field. YOUR R&D Tax provide a professional, value based model with the tools, expertise and experience to enable applicants to maximise their claims and benefits while maintaining the necessary compliance aspects of the process.
