Could Your Business Be Eligible for the Research and Development Tax Incentive?
The Australian Government has partnered with AusIndustry to offer companies that perform research the opportunity to gain additional tax concessions through the Research and Development Tax Incentive. If your company has performed any research throughout the year, is working on developing a new idea or has been developing software, you may be eligible for the Research and Development incentive.
The Research and Development (R&D) Tax Incentive provides a tax offset for eligible R&D activities and is targeted toward R&D that benefits Australia. The incentive, which came into effect on 1 July 2011 and replaces the R&D tax concession, is geared towards encouraging companies to engage in R&D. It has two core components:
- a refundable tax offset for certain eligible entities whose aggregated turnover is less than $20 million
- a non-refundable tax offset for all other eligible entities.
To be eligible for the R&D tax incentive you must be an R&D entity, be engaging in eligible activities and in most cases have notional R&D deductions of at least $20,000.
According to the ATO, there are certain steps that need to be undertaken in order to claim the R & D tax offset. Before you can claim the R&D tax incentive, you must first satisfy four initial requirements. You must be sure that you:
- are an eligible R&D entity
- carry out eligible R&D activities
- have registered with AusIndustry
- have incurred expenditure that qualifies as notional deductions.
If you would believe you may fit the criteria and may be eligible, please contact John Hurley on 02 9954 3843 or email admin@hurleyco.com.au so we can review your position.