The Straight Up Guide to the R&D Tax Incentive Application

Business owners applying for R&D tax incentive

The R&D tax incentive could give your business a much-needed boost this year, but untangling everything you need for the R&D tax incentive application can, at the very least, be extremely annoying and, at worst, a downright paperwork nightmare.

Tax-savvy businesses are lowering their tax obligations while gaining a competitive advantage over their rivals through the R&D tax incentive.

This Get Grants guide answers your questions on maximising this R&D grant. We give you a simple walkthrough of what you can expect and do to make the R&D tax incentive application process a breeze.

What is the R&D tax incentive?

The R&D tax incentive is a government program encouraging businesses of all sizes to experiment with research and development (R&D) activities. Eligible businesses can get a rebate for developing new products and services. The R&D tax incentive allows companies to claim back up to 43.5% of the costs related to research and development.

For more info on this grant, check out our video explaining the R&D grant.

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Does my business meet the R&D tax incentive eligibility criteria?

One great thing about the R&D tax incentive is that it’s an entitlement grant. Unlike most other grants, where your business has to compete against others for a share in a small pot of funding, with the R&D tax incentive, all you need to do is meet the eligibility criteria to get the grant. Competition for grants is often a sticking point in applying, so that’s one hurdle that’s easy to jump if your business is eligible for the R&D tax incentive.

Changes to the R&D grant were brought in last year, so keep reading for the latest eligibility advice. 

R&D tax incentive eligibility criteria

  1. You must be a business undertaking research and development towards producing your products or services in Australia.
  2. Your business has to spend at least $20K on eligible R&D activity per year.
  3. The business has to operate as an Australian incorporated company (so, no trusts, partnerships or sole traders).

Better yet, if your business turnover is under $20 million, the refundable offset can be delivered to you as a cash refund that you can use to reinvest in the business or extend your runway. Other qualifying companies with a turnover over $20 million receive a non-refundable tax offset that lowers the income tax the company has to pay.

person working with technology

Is now a good time to invest in R&D and take advantage of the R&D tax incentive?

Heck yes! With the economy being a top priority for the government right now as we recover from the Covid-19 pandemic, this is the perfect time to invest in R&D and take advantage of the R&D tax incentive—and other business grants, for that matter!

Specific to the R&D tax incentive, though, the government has noticed that businesses have been underinvesting in R&D. The reason for this underinvestment is thought to be a lack of external financing for experimentation without a guarantee of success. That’s the beauty of the R&D tax incentive — this grant specifically drives experimentation and boosts productivity for R&D within Australian companies.

In short, the R&D tax incentive is not only good for the company eligible for the grant, but it’s good for Australia too, as we all benefit from your experimentation and efforts to develop cool stuff!

The R&D tax incentive is given to businesses to support and encourage them as they invest in the often costly and challenging terrain of research and development.

Take advantage of the government’s focus on supporting the economy and encouraging growth. If you want to make the R&D tax incentive application process easy and to maximise the amount of R&D tax incentive you can get for your business, check your eligibility and get in touch with one of our grants experts today.

example of australian inventions

How can I leverage the R&D tax incentive for my business?

The R&D tax incentive can help fund nearly any technological advancement!

Here are some examples of some successful R&D claims that we have worked on:

  • New software solutions using machine learning, AI, blockchain technology.
  • Development of new food or beverage product formulations or optimised processes that requires bench and factory trials. 
  • Development of emerging renewable technology. 
  • Development of new and sustainable farming processes.
  • Development of new medical technology solutions for health applications.

There are no limits to what your business can achieve if you use incentives to conduct research, improve efficiency or develop new products. The R&D outcomes can have far-reaching implications beyond the rewards for your own business.

Are you struggling with the traditional R&D Tax Incentive application process?

First, you’re not alone— the struggle is real!

Here are the key steps you need to take to lodge an R&D Tax Incentive application for your business:

  1. Identify eligible R&D projects and expenditure upfront and throughout the year. 
  2. Collate supporting documents to ensure your R&D claim is supported by documents throughout the claim year. Supporting documents can include everything from the collation of internal documents and reports to the finer details of the R&D project with specifics of how it all works.
  3. Draft the R&D Application, describing the technical objectives, the experimental process, the new knowledge being generated and the technical uncertainty. 
  4. Lodge an activity registration with AusIndusrtry that describes the R&D operations for your business. 
  5. Calculate the costs of the R&D project and make sure that you are maximising your R&D tax incentive entitlement.

Sound like a lot of work? There’s no getting around it; it is a TON of admin (ew).

How can I maximise the R&D tax incentive AND make the R&D tax incentive application process easier?

That’s why we’re here! At Get Grants, we help businesses like yours apply for government grants. Grants are what we live and breathe, and we know all the ins and outs to prepare you for success. Sit back, relax, and let Get Grants get on with the paperwork (and leg work) to get your R&D tax incentive application across the line.

If you’ve decided to lodge your R&D tax incentive application, be sure to get everything you can out of it! The Get Grants team know the application process back-to-front, and we have the know-how to help you max out your R&D tax incentive entitlement.

If you’re worried about the complexity of the application process and the accompanying paperwork nightmare, we can help. We simplify the complex and take the stress out of what can be a super stressful application process.

The super simple 3-step Get Grants process

  1. We team up with your project team and your accountant to identify all eligible R&D activities and expenditures you can claim. We’ve done loads of these, so we know exactly what to look for.
  2. We collaborate with you, the business owner, to prepare the R&D tax incentive application form and accompanying schedule.
  3. We lodge the R&D tax incentive application on your behalf and liaise with the grant regulators to manage and resolve any queries about your application as they come up.
  4. Sit back. We’ve got this! We’ll get on with the grant process while you get on with running your business.

Ready to maximise the R&D tax incentive for your business? Get in touch today.

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