The latest GE Innovation Barometer Report has revealed that Australia has moved up three spots to 13th in the global innovation ranks. In particular, 67% of Australian executives surveyed said they believed the Australian market is strongly “innovation conducive”, in comparison to 31% of those surveyd a year ago.
The other interesting finding is that 92% of survey respondents believe that small and medium sized businesses were capable of being as innovative as the big companies.
However, it is troubling to read that Australia is still struggling to commercialise new products and innovation. One of the main reasons for this setback is a belief that access to public funding is complex and needs to be more effecient.
More specifically, the R&D Tax Incentive was again in the spotlight, with a siginificant number of respondents stating that the new rules and additional requirements are an impediment to accessing funding.
This is also in line with the previous research indicating that 42% of Australian businesses that have developed new technologies do not claim the R&D Tax Incenties.
What can be claimed?
The R&D Tax Incentive consists of a 45% refundable tax offset for entities with a group turnover of less than $20M, and a 40% non-refundable tax offset for all other entities.
How does it work?
For example, company involved in design and manufacturing, with a turnover of less than $20M. As it incurs eligible R&D expenditure of around $200,000, the company can reduce its underlying tax payable by $30,000 by claiming the R&D tax offset. Also, if the company is in tax losses then it will be entitled to receive a cash refund of up to $90,000 from the ATO.
What expenditure can be claimed?
The types of expenditure incurred on R&D activities may include salaries, payments to research agencies and consultants, construction and testing of prototypes, as well as production trials. Other costs such as administrative overheads, lease or depreciation of equipment may also claimable.
If your business carried out R&D work in the previous financial year, there is still time to submit a claim prior to the registration deadline of April 30, 2013.
If you are not sure if your business is eligible to claim the R&D Tax Offset or wish to discuss the opportunities further, feel free to call Saving Point on 03 9555 3551.
