On February 11, the Senate’s Economic Legislation Committee handed down a report in to the proposed changes to the R&D Tax Incentive. After receiving submissions from industry stakeholders and businesses involved in R&D, the changes have been put on hold.
As there are not enough sitting days available before the coming Federal Election to be held in May 2019, the proposed changes are on hold until after the election.
The changes proposed included the following:
Raising the eligible expenditure threshold for R&DTI claims from $100 million to $150 million.
A $4 million cap on annual cash refunds for companies with an annual turnover of less than $20 million.
Refundable tax offsets to be calculated as 13.5 percentage points above the claimant’s company tax rate.
Intensity based thresholds on the tax benefit derived from undertaking R&D for companies with a turnover of more than $20 million.
The proposed changes aimed to cut $2.4 billion from the R&D Tax Incentive component of the federal budget over a 4-year period.
The Economic Legislation Committee received 75 submissions from companies, universities and R&D Specialists. The majority of submissions were critical of the changes and expressed concern that cutting the amount of government investment in R&D in Australia would drive companies off shore.
There is concern also for the SME’s that carry out R&D who rely on the incentive to continue product innovation and business development from inception to market with some respondents submitting that the changes would mean the end of R&D in the small business segment.
The good news is that the Senate Committee has sent the changes back to the government with a request for further analysis of the impact of any changes as no actual modelling has been undertaken by the treasury. The proposal seems focused solely on making financial cuts to the scheme without actually assessing the impact it may have on Australian innovation and industry.
RADBE Consulting will be keeping a close eye on any developments or announcements regarding the R&D Tax Incentive in the federal budget due in April and in the lead up to the federal election.
If you would like to know how these proposed changes may affect your business, please get in contact with one of our consultants.
On February 11, the Senate’s Economic Legislation Committee handed down a report in to the proposed changes to the R&D Tax Incentive. After receiving submissions from industry stakeholders and businesses involved in R&D, the changes have been put on hold.
As there are not enough sitting days available before the coming Federal Election to be held in May 2019, the proposed changes are on hold until after the election.
The changes proposed included the following:
Raising the eligible expenditure threshold for R&DTI claims from $100 million to $150 million.
A $4 million cap on annual cash refunds for companies with an annual turnover of less than $20 million.
Refundable tax offsets to be calculated as 13.5 percentage points above the claimant’s company tax rate.
Intensity based thresholds on the tax benefit derived from undertaking R&D for companies with a turnover of more than $20 million.
The proposed changes aimed to cut $2.4 billion from the R&D Tax Incentive component of the federal budget over a 4-year period.
The Economic Legislation Committee received 75 submissions from companies, universities and R&D Specialists. The majority of submissions were critical of the changes and expressed concern that cutting the amount of government investment in R&D in Australia would drive companies off shore.
There is concern also for the SME’s that carry out R&D who rely on the incentive to continue product innovation and business development from inception to market with some respondents submitting that the changes would mean the end of R&D in the small business segment.
The good news is that the Senate Committee has sent the changes back to the government with a request for further analysis of the impact of any changes as no actual modelling has been undertaken by the treasury. The proposal seems focused solely on making financial cuts to the scheme without actually assessing the impact it may have on Australian innovation and industry.
RADBE Consulting will be keeping a close eye on any developments or announcements regarding the R&D Tax Incentive in the federal budget due in April and in the lead up to the federal election.
If you would like to know how these proposed changes may affect your business, please get in contact with one of our consultants.
Latest News
R&D Update: 2020-21 Application Deadline
Please see some important timeline updates from RADBE about the R&D Tax Incentive over the coming months.
2020-21 R&D Closing Soon There are only 3 monthsremaining to finalise your R&D application for the 2020-21 financial year. R&D Tax Incentive claims for the 2020-21 financial year close in April 2022, please contact us or your RADBE Consultant if you are interested in pursuing a claim.
New AusIndustry Requirement – Portal Access The Australian Government now require all R&D Tax Incentive applications to be made through the designated AusIndustry portal. Detailed instructions can be found here. If you are not an established myGovID user for your business, this process may be lengthy and may impact our ability to submit an application by the deadline if not addressed soon.
Conducting R&D activities offshore? An Overseas Finding is required where an eligible R&D activity is unable to be conducted in Australia and is subsequently undertaken overseas (excluding purchase of raw materials, off-the-shelf products, etc.). It is necessary to lodge an Overseas Finding prior to the end of the claim period (i.e. 30 June 2022) and typically occurs when facilities, equipment, environmental or biological features are not available in Australia. If you think that this may apply to you, please contact us for more information.
Doing R&D under a New Zealand company? RADBE is now processing claims under New Zealand’s recently implemented R&D scheme, with pre-registration for 2021-22 due by May 7, 2022.
If you would like more information regarding any of the above, please contact us.
The Queensland Government is committed to opening Queensland back up for business in the wake of COVID-19, funding a free business education program designed to help navigate economic impact.
The program is available to small business owners, their staff, aspiring and previous operators. It provides access to online resources, including libraries, materials, activities, classes, workshops, courses, e-books, templates and tools to assist businesses in understanding and navigating a response and build a stronger future.
The program is valued at upwards of $5,000 per user, and includes coverage of:
The R&D Tax Incentive is undergoing a number of reforms as part of the 2020-21 Federal Budget, including increased benefits for the 2021-22 financial year. Find out more here.
The research and development tax incentive (RDTI) was a main focus during the Department of Industry’s appearance at senate estimates on Thursday afternoon.
The guidance outlines how companies undertaking software development will have to be more specific with making sure that activities meet the government’s definition of research and development, and keep better records of the activities...
September Update for State based Government Grants
STATE-BASED GOVERNMENT GRANTS – SEPTEMBER 2018 UPDATE
In the 2018 budget the Queensland Government injected an additional $73 million over 4 years into the Advance Queensland Program bringing the total available funds to $650 million.
Australia, New Zealand, and the United Kingdom Phone | +61 7 3216 6242 Email | info@radbe.com.au Head Office | Level 2, Building 2, 50 McDougall Street, Milton, Queensland, 4064 (Australia) Postal | PO Box 2380, Milton Queensland, 4064 (Australia)
