Don’t miss out on this (generous) tax credit!

Accessing the federal government’s research and development tax incentives is often considered or assumed to be too complicated by many small to medium business owners. However the benefits can be well worth the effort, particularly given that the tax credit can be in the form of a cash rebate where a resulting tax loss occurs.

In recent times some of our clients have had great success accessing their R&D entitlements by engaging experts to review their entitlements and assist with the preparation of the necessary documentation. That is, someone else has come in and done all the hard work for them which resulted in either a reduction in tax payable or a tax refund.

If eligible for the R&D Incentive, Companies will receive a Tax Offset based upon their turnover as follows:

• For Companies with Group Turnover Less Than $20M: 45% Refundable Offset (equal to a $0.15 tax saving for every dollar of eligible R&D expenditure)

• For Companies with Group Turnover Exceeding $20M: 40% Non-Refundable Offset (equal to a $0.10 tax saving for every dollar of eligible R&D expenditure)

Companies in a tax loss position that qualify for the Refundable Offset are also able to receive a cash refund of $0.45 for every dollar of eligible R&D Expenditure to the extent of the company’s tax loss amount.

Companies who submitted their 2012 claims near last year’s deadline should be aware of changes to the registration application introduced in October 2013. This includes the additional requirement for:

• Details of the new knowledge intended to be produced by the core activities and how this is different from current knowledge in the relevant field;

• Details of how the outcome of the registered core activities could not have been known in advance based on current knowledge, information or experience;

• Details of how each core activity can be shown as an experiment including a statement on the relevant hypothesis, experiment, observation and conclusion;

• Details of how supporting activities contribute to a corresponding core activity.

If you would like to review the eligibility requirements further, please refer to the attached document prepared by us…..but you must act very quickly if claiming for the 2013 financial year!

Companies are still able to claim their Eligible R&D Expenditure for the 2013 Year by registering with AusIndustry by the April 30, 2014 Lodgement Deadline. Please call us for further information or assistance