Do you think your company is innovative? What makes a business innovative and
how should we define innovation?
Innovation means coming up with new ways to do things. That can either be through changing processes or creating more effective products and ideas, but as long as these processes, products or ideas involve the creation of new knowledge, then your business can almost certainly eligible for FREE money from the government.
The free money comes from the Research & Development Tax Incentive (RDTI) program which encourages companies to engage in R&D by providing a tax offset for eligible R&D activities. By investing in eligible R&D, the government will provide businesses with up to 46.5% of their money back in the form of a cash refund or a tax break. When you look at the RDTI as free money back to the company, you would have to be curious as to why so many eligible companies do not participate in the scheme?
For some, it is just all too hard. Applying to the RDTI is seen as a tax issue and is usually left to the CFO and finance department in a step that is disconnected from the people doing the R&D. Often, the finance people do not understand the research and development that their company does, in sufficient depth and detail to be able to accurately fill out the registration form. Mistakes or lack of the right detail in describing the R&D in the registration form are a common reason why applications to the RDTI are rejected.
However, the process is not a particularly difficult one when it is undertaken proactively. For example, the first step in the process is to create an R&D Plan for the financial year that will help you and your team undertake activities that can be claimed under the program. The second step in the process is to keep accurate records during the year which will provide the necessary evidence that the R&D was performed. Finally, at the end of the year, you and your tax advisor can simply take the plan and documentation and transfer that to the RDTI application and your tax return.
Apart from doing something new, the other requirement for R&D is that you are generating the new knowledge using experiments. An experiment is a structured and logical way of testing something against a statement of need (hypothesis). For many businesses this is an unusual way to think about their innovation process, but it is needed for the program and, more importantly innovating using a reliable methodology will help your company grow faster with better margins.
There are millions of companies in Australia and only a tiny fraction of them currently conduct R&D. If you already consider yourself to be an innovative company, then why not consider adding your company to this list and accessing some free money from the government, by getting in touch with R&D Certainty?
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