How To Get Most Out Of Your R&D Tax Incentive?

The research and development tax incentive is a governmental incentive program that supports your business. It allows you to invest more in R&D activities. An R&D grant can be an important element of funding the development of a new product or service provided by your company. It is designed to help Australian companies offset the cost of undertaking their R&D activities and provide much-needed cash flow. It has certain eligibility criteria which are carefully audited by the regulators-AusIndustry and the ATO.

The pieces of information found on the internet can be overwhelming for anyone. Rimon’s EMDG and R&D tax incentive grant consultants’ expertise is the R&D Tax Incentive and Export Market Development Grant. They have offices in Sydney and Melbourne and clients countrywide. From beginning to end they are a full-service RDTI outfit. Their team of R&D Tax Incentive consultants works together with the technical team to put the best eligible value to your R&D. They work with departments like manufacturing, food & beverages, mining, IT & software, health & medical, tourism & fashion. You can easily book a consultant and ask for their advice. Their technical team of engineers and computer scientists will dive deep to understand your innovation, product, software, or hardware.

This program empowers the companies that bring or at least try to bring the future a bit closer. Innovative companies can get back up to 43.5% of their eligible spending on R&D. Starting from space prototypes and robotic arms to software development, developer salaries, etc. resides in the range under the R&D incentive program.

Few Ways To Use It Better

1. Work out your hypothesis and start with a plan: One of the key eligibility requirements is that the “outcomes of the R&D activities are unknown and only able to be determined through a systematic progression of work”. Hence you should definitely assess your company activities if they are eligible for the incentive. Your company should have a plan or a hypothesis on your further activities. Your hypothesis and plan should reflect the question/s you are trying to answer, provide measurable objectives, and identify the unknown information or new knowledge you are trying to establish.
2. Assign an R&D Champion/Single Point of Contact (SPOC): There are going to several departments in your company from technical to financial and marketing to CEO. To manage the R&D tax incentive process and keep control of documentation requirements, you need a single point of contact to take charge of the compliance process. The key to the role is that a company develops processes to identify potential R&D activities at the outset and assign an R&D champion (for each project or as a whole) at the start of the R&D process.
3. Choose The right Projects: The definition of ‘project’ changes with the context. It is basically the granularity of detail. In other words, how many pieces you divide an activity into. Generally, you have to set the detail level up so that you end up with 3-5 projects. You can cover 1-3 of them at most in a claim. Write a cracking technical narrative for your projects. Add details of your project to the narrative. Keep it simple and don’t use jargon. While submitting your technical narrative, you must ensure that you’re selecting the right project(s) to claim for.
4. Get the timing right: Time: There goes a saying that, “Time is Money”. Make sure you launch on time to maximize the time value of your money. Lodgement of the R&D Tax Incentive can be made up to ten months after the end of the financial year. The sooner you register your claim and lodge your tax returns the sooner you can access your refund. Even before the end of the financial year, companies should consider whether all documentation is in place and costs paid and not just accrued.
5. Reconcile: Finally, before you file, go through your claim with a fine-tooth comb and re-check that all your calculations can be matched back to your P&L, the tax computations, and the CT600. There’s no bigger red flag for HMRC than numbers not adding up. All costs must be matched and consistent with each other so it is easy for HMRC to identify which costs are located where.

So, do your research and go ahead with your dream project!!!