R&D Tax Advisory
Helping you access and maximise R&D Tax incentives for your business.
The R&D Tax Incentive
What is the RDTI?
The Research and Development Tax Incentive (RDTI) offers a tax offset for companies conducting eligible R&D activities. It encourages investment in R&D to help your company to grow and innovate.
The R&D Tax Incentive provides valuable and consistent Government support for your investment in R&D and innovation.
What types of activities are eligible?
The definition of R&D for tax is broader than ‘laboratory R&D’. Companies that self-prepare R&D claims, and even those using consultants, often are only identifying the low hanging fruit and not identifying eligible R&D in all areas of their operations (e.g. applying existing technologies to a new scenario).
Importantly, eligible R&D activities need to be registered within 10 months of the end of a claimant's financial year. For 30 June companies, this means registration of R&D activities is due by 30 April each year.
To be eligible, companies need to demonstrate that they are undertaking core R&D activities’ which have the following attributes:
Benefits of the R&D Tax Incentive
Company Turnover <$20 million
Businesses with a group turnover of less than $20 million can receive a refundable tax offset of up to 48.5% of their R&D spend.
If a company has no tax liabilities and sufficient tax losses, this is receivable as a cash refund.
Example: $100k R&D Spend with $100k Tax Loss
The company has incurred a loss equal to its R&D spend and has a corporate tax rate of 25% .
The R&D tax offset rate is the company tax rate plus 18.5%.
R&D Tax Offset Rate Calculation: 25% + 18.5% = 43.5%
R&D Tax Offset Calculation: $100,000 x 43.5% = $43,500
Since the company has no tax liability, it will receive a tax refund of $43,500.
Company Turnover >$20 million
Businesses with group turnover of more than $20 million receive a non-refundable R&D tax offset.
The tax offset amount is based on your R&D Intensity. This is the percentage of total operating costs that you spend on R&D in a year:
All eligible R&D expenditure up to 2% R&D Intensity will receive a non-refundable R&D tax offset equal to your tax rate plus an 8.5% premium.
Additional eligible R&D expenditure above 2% R&D Intensity will receive a non-refundable R&D tax offset of your corporate tax rate plus a 16.5% premium.
The RDTI is non-competitive and self-assessed, so it can be claimed annually in your tax return as long as you properly identify, document, and register what activities and costs are eligible.
Amounts you can claim can include:
salaries and wages for time spent on R&D activities
contractor costs related to the R&D activities
the decline in value of assets used for conducting R&D activities
other business expenditure attributable to R&D activities
monetary contributions under the CRC program.
How we can help?
R&D Tax Claim Preparation
We offer hands-on assistance with all aspects of preparing your annual R&D Tax claim. This includes helping to identify R&D activities undertaken across all aspects of your operations and preparation of the key deliverables needed for the claim.
Unlike other consultants, you deal directly with senior personnel with more than 10 years’ experience and are not relying on your own team to do the bulk of the work needed to prepare and lodge the claim.
We offer a ‘high-touch’ approach and work with you along every step of the claim preparation process so that you know which activities and costs have been claimed and have confidence in the recommendations we make.
Audit Risk Assessments
We provide comprehensive R&D tax audit risk assessments and due diligence, and can act as a ‘second pair of eyes’ to help you identify and address any potential audit risks in your annual R&D claim.
We have experience supporting clients, from start-ups through to large ASX listed companies, to successfully navigate compliance reviews with both AusIndustry and the ATO. Importantly, we are familiar with the current issues being identified for audit and our risk review process is designed to help you address any areas of risk in your claim before being flagged for audit by the regulators.
You can trust us to identify risks and recommend improvements to your claim process as we proudly maintain a market-leading 100% success rate in compliance review.
Strategic R&D Tax Advice
Our services go beyond merely ‘ticking the boxes’ for your R&D Tax Incentive claim. We also provide you with strategic advice and recommendations to improve your R&D claim processes and partner with you to help maximise the benefits available whilst mitigating your risk exposure.
We have extensive experience implementing new or improved documentation practices for companies to better substantiate their R&D activities and costs.
We also provide flexible R&D claim support which can include training for your technical and accounting personnel, regular updates on program developments, and in-year check-ins with project managers to help plan and provide advice on the eligibility of upcoming projects.
