26th November, 2018
This Friday, one of Australia’s most popular and lucrative government grants, the Export Market Development Grant (EMDG), reaches its deadline for 2018.
In short, the scheme offers SME businesses with annual revenue of less than $50 million a 50 percent rebate on overseas marketing expenses incurred throughout the course of the financial year.
The rebate is capped at $150,000 and can only be claimed eight times during the lifetime of a company.
With the deadline now less than five days away, there may be some business owners playing with the idea of putting through a claim but unsure what to consider before actually doing so.
Here are a few ideas.
It’s important to make sure there’s clear value to be derived from going through the application process before putting in an EMDG submission.
A good way to achieve this is through a cost-benefit analysis.
Start by taking out your Profit and Loss statement and have a look at the expenses you’ve accumulated during the grant period that you can potentially claim against.
The types of expenses that can be claimed as part of the grant are:
It’s also important to mention that the minimum amount that can be claimed is $15,000, and the first $5000 that you claim is automatically deducted.
So, basically, the minimum grant value you can receive is $5000.
Whether you decide to submit on your own, or by using a specialist consultant, there’ll be a cost in gathering all the information and putting through the submission.
Depending on the status of your business’s cash flow, you might want to run the numbers properly and decide on whether it is worthwhile for you to go through the exercise. This is made much easier if you’ve been using a comprehensive, online accounting software.
As mentioned earlier, the maximum grant that a company can receive per application is $150,000 (for $305,000 worth of expenses).
But first-time applicants have the option to combine two years of expenses to maximise their entitlement.
If you’re still running (or planning to run) export activities this year (from 1 July until 30 June) and are likely to stay under the threshold of $305,000 of expenses, it might be worthwhile waiting until 1 July 2019 to submit your claim.
On the flipside, if you’ve run your cost-benefit analysis and found you’ve incurred large amounts of expenses on export activities over the last two years, if you don’t put in a claim before November 30, the expenses from 1 July 2016 to 30 June 2017 will not be able to be included in your next claim.
One of the challenges of preparing an EMDG submission retrospectively (or any other government grant for that matter), is that it can be difficult to source the evidence that is required to substantiate the claim.
Each company submitting an EMDG claim for the first time is guaranteed to receive an audit from Austrade (the government body who administers the grant) and they are notorious for wanting to see substantive evidence for what the company is claiming.
The types of supporting documents that Austrade like to see are things like travel diaries, detailed invoices and bank/credit card statements, boarding passes/frequent flyer statements, and other such documents.
If you don’t have the evidence handy – don’t apply.
If you do have the evidence but don’t have the capacity to collate it before the deadline, it may be worthwhile to put in a submission and start working to gather the evidence afterwards.
Late submissions typically get audited between three to five months after lodgement, so you should have plenty of time to gather evidence before the audit takes place.
In summary, if you’ve been spending money on exporting your Australian product, goods or services to an overseas market, there might be some government funding that you can tap into.
Whether it’s a last-minute submission before 30 November, or a submission next July, make sure you’re not leaving any money your business is entitled to on the table.