How to take advantage of government grants and tax incentives
Thomas Edison once said that “Genius is one percent inspiration and 99 percent perspiration”.
Unfortunately, going from that inspirational idea to the finished product takes a lot more than hard work. Just like Edison, you also need to invest in a lot of research and development.
And R&D doesn’t come cheap.
Fortunately the Federal Government helps business in two ways: Grants and Tax Incentives.
Government Grants – What’s available to you?
You might be surprised to find out just how many different government grants and assistance programs are on offer. The Federal Government’s Grant Finder page helps you work out the grants your business may be eligible for. Click Business and Industry on the left of the screen and you’ll see pages of grants listed. Depending on your type of business, different grants might be applicable.
The Grants & Assistance Finder on business.gov.au has a more detailed listing of grants and assistance programs. You can filter on State or Territory and Type of Grant or Assistance.
Get in touch with us if you’d like us to shortcut the process for you, and we’ll let you know which grants are worth applying for in your situation.
Keep in mind there’s no guarantee a grant application will be successful. That’s one reason the next type of assistance is so appealing…
The R&D Tax Incentive – Are you eligible?
Innovate, and you reduce your tax. That’s the idea behind the Research and Development (R&D) Tax Incentive. It provides R&D tax offsets to encourage businesses to innovate and engage in R&D.
Businesses conducting R&D may be eligible for:
- a 45% refundable tax offset (that’s equivalent to a 150% deduction) for eligible entities with an aggregated turnover of less than $20 million per annum, provided they are not controlled by income tax exempt entities
- a 40% non-refundable tax offset (equivalent to 133% deduction) for all other eligible entities (entities may be able to carry forward unused offset amounts to future income years).
The program is jointly administered by AusIndustry and the Australian Tax Office (ATO).
To register for the tax incentive you must lodge your application within 10 months of your company’s income year.
Each year you must apply to register for the R&D Tax Incentive. This is a self-assessment process for companies using the R&D Tax Incentive Online Eligibility Tool. This will give your company an indication of its eligibility.
It’s important that your company keeps adequate records throughout the year to show it carried out eligible activities in incurring the claimed expenditure.
If you’re eligible for the R&D Tax Incentive but not applying for it, you’re leaving cash on the table. We can help you make sure you tick all the relevant boxes so you don’t miss out.
If the government is offering your business financial assistance through tax breaks, take them!
A little perspiration will be worth it
Remember Edison’s words. The ‘perspiration factor’ can’t be avoided. You need to apply for the grants and tax incentives, but the effort can be well worth it. And we’ll share the load with you.
Drop us a line and we’ll make a time to catch up and have a chat about your eligibility and the next steps required.