Thinking of getting your R&D claim in?
Just in case you don’t have enough deadlines already, the Australian R&D Tax Incentive deadline is looming.
The incentive, one of the most lucrative Australian government incentives for businesses working on innovative technological development, is heading very quickly towards its submission deadline for companies with a 30 June financial year end.
This deadline is 30 April 2018.
The R&D Tax Incentive provides a cash rebate of up to 43.5 percent of all expenses relating to research and development activities that a company incurs during any given financial year.
So if you’ve been innovating, experimenting and testing and your business spent $20,000 or more doing so, you may very well be eligible to take advantage of this valuable incentive.
If you’ve been considering submitting an application, or are in the process of preparing one, here are some noteworthy guidelines that you might want to keep in mind:
1. Proofread your application
Proofreading and reviewing your application is of utmost importance. In general, four eyes are always better than two, and your R&D application is no exception.
If you prepared the application yourself, make sure to have someone else review it, and if you paid for a consultant to prepare it for you, make sure to review it yourself before submitting.
You’ll be amazed at how small mistakes can make a big difference.
2. Submit with July in mind
If you’re only submitting now, you may not know that the FY2017/18 applications are open for submission on 1 July (just two months after the FY2016/17 deadline).
If you’re already putting in a lot of work to ensure that your claim is solid and robust, keep in mind that a lot of the same documentation is likely to be relevant for the new submission.
Once you’ve submitted your 16/17 application, I would recommend rolling straight into preparation for your 17/18 claim. The process will be far more efficient – not to mention you’ll potentially get your rebate back quicker.
3. Take extra care if you’re claiming software development costs
Just like with all incentive applications, you need to make sure that everything you (or your third-party consultant) has written in the application has adequate documentation that can act as support in the event of a review.
Both AusIndustry and the ATO (the two government bodies that administer the incentive) are tightening the strings around software development claims, and trust me when I say you don’t want to be on the wrong end of one of their reviews.
4. Always remember, better safe than sorry
For those who are preparing their own claims, if you have any doubts around the eligibility of the activities or expenditure, make sure to only submit once you’ve clarified your doubts by talking to an expert or contacting the government directly.
Unlike most other grants, this incentive works as part of the Australian tax system and incorrect information on an application may result in penalties and fines issued by the government.
As someone who works with this incentive on a daily basis, I highly recommend going ahead with a claim as long as you have put in the right amount of work to ensure that you are following all the necessary steps outlined above.