R&D Tax Incentive Support
Turn eligible innovation work into a real tax benefit, with a claim that is properly supported.
- The R&D Tax Incentive is an Australian Government program that provides tax offsets for eligible R&D expenditure
- Claims require registration of activities each year and on time
- Strong records reduce risk and support your position if reviewed
If your team is experimenting, testing, building, refining or solving technical uncertainty, you may be doing eligible R&D. We’ll help you work out what qualifies, set up the right evidence, and prepare and submit your claim within the deadline.
What you can receive
R&D tax offset outcomes depend on your size and R&D intensity
For income years starting on or after 1 July 2021, the R&D Tax Incentive generally operates as:
- Refundable offset for eligible entities with aggregated turnover under $20 million, calculated as your corporate tax rate plus 18.5 percentage points, provided you are not controlled by income tax-exempt entities
- Non-refundable offset for other eligible entities, calculated as your corporate tax rate plus a premium based on R&D intensity: 8.5% up to 2% of total expenditure, and 16.5% above 2% of total expenditure
- Premium treatment applies to notional R&D deductions up to $150 million. Above this, the rate reduces to the corporate tax rate for that excess portion
- Smaller firms may be able to access a refundable benefit. Larger firms access a non-refundable benefit that can reduce tax payable, with unused amounts generally carried forward
Ask us to estimate your potential benefit or find out more! Contact us today
FAQs
What is the Research and Development (R&D) Tax Incentive?
The Research and Development (R&D) Tax Incentive is an Australian Government program designed to encourage businesses to invest in innovation and research activities. It provides eligible businesses with tax offsets for expenditure incurred on qualifying R&D activities, helping reduce the cost of developing new or improved products, processes, or services.
Who is eligible for the R&D Tax Incentive?
Businesses eligible for the R&D Tax Incentive, are those who are undertaking activities that meet the current legislative requirements regardless of the industry the business operates in. As legislation changes regarding the nature of eligible activities, eligibility may change annually and must be reassessed accordingly.
What types of activities typically qualify as R&D?
Eligible R&D activities typically involve testing or experimenting a hypothesis with the purpose of generating new knowledge or improving on existing knowledge. The research must contain uncertainty, and the activity must have a clearly outlined aim as to how it will advance knowledge.
Is the R&D Tax Incentive only for technology companies?
This is a common misconception. The R&D Tax Incentive in not limited to technology businesses and is for companies in any industry that meet the activity eligibility requirements.
What does Pretium Solutions do as part of an R&D Tax claim?
Pretium Solutions assists businesses throughout the R&D Tax Incentive process by assessing eligibility, helping establish and maintain appropriate records, and preparing and submitting the R&D Tax claim. This support is designed to ensure claims are accurate, compliant, and supported by the required documentation.
What Records are required to support an R&D Tax Incentive claim?
Businesses are required to keep adequate records throughout the year to demonstrate that eligible R&D activities were conducted and that the associated expenditure was incurred. These records are used to support the claim if reviewed by AusIndustry or the Australian Tax Office. Records must contain a complete budget for all expenses incurred when conducting the activity.
When should a business engage an advisor for R&D Tax?
Businesses should consider engaging an advisor early, ideally while R&D activities are being planned or undertaken. Early involvement helps ensure eligibility requirements are understood and that appropriate records are maintained throughout the year.
How risky is claiming the R&D Tax Incentive?
The R&D Tax Incentive has specific eligibility and documentation requirements, and claims may be reviewed by government agencies. Maintaining accurate records and seeking professional advice can help manage compliance risk and improve the quality of a claim. Failure to maintain appropriate and accurate records could lead to your claim being denied.
What happens if a claim is reviewed by the ATO or AusIndustry?
If a claim is reviewed, the business may be required to demonstrate that its activities and expenditure meet the program’s eligibility requirements. Adequate documentation and records are critical in supporting a claim during any review process.
How do refundable and non-refundable offsets differ?
The key difference is whether the offset can result in a cash refund. A refundable R&D tax offset can reduce a company’s tax liability to zero and may provide a cash refund for any remaining amount. A non‑refundable R&D tax offset can reduce tax payable to zero, but any unused amount is carried forward to future income years rather than refunded in cash.
Check out our blog and podcast:
What is the Research and Development Tax Incentive?
How do I prepare my Research and Development Tax Incentive claim?
Your business, government grants and tax incentives. Are you cashing in?