Is your R&D tax working for you?

And by that we mean: In advance

R&D tax incentives for Australian businesses

The Australian Federal Government’s R&D tax incentive program is one of the largest sources of early stage funding for startups. It provides refunds of up to 43.5 per cent of the costs of development work.

Did someone say 43.5 per cent refunds?

Yes. And more than 12,000 companies currently access the program (mostly SMEs and startups). You are likely to be eligible if you:

  • Are a company undertaking innovative, unique, non-trivial software or hardware development
  • Can describe this development as a series of experiments with unknown outcomes from which you have learned as you’ve progressed
  • Have spent at least $20K on R&D during the year, including employees and Australian contractors and their costs including equipment, rent and other R&D related overheads

So how do you get the money?
If you are eligible, here’s how it usually happens:

  • If you’re an early stage startup and not yet profitable, you will receive a 43.5 per cent cash refund from the ATO, typically six to eight weeks after lodging the R&D claim and associated tax return
  • If you’re already profitable, your R&D claim can reduce the tax that you’d otherwise be paying.

Unlike other R&D providers, our fees are fixed and transparent.

Want options? You got it.

We understand that every client’s needs are different, and you may be at different stages on your journey so we’ve partnered with two different specialist R&D providers to support startups depending on where they’re at.

Our core Nifty grants option is backed by PwC whom we’ve been working with for the last 3 years.  It comes with the service delivery, feedback and support and initial audit response you’d expect from one of Australia’s leading professional service firms.  

For smaller claims we’ve partnered with a smaller independent R&D firm, Catalyst Solutions, that may better suit clients with a small R&D spend.

Both experts, both fixed fee with your grants lodged with AusIndustry.  Both supporting you in initial queries in the event of an ATO or AusIndustry audit.

And and and … there’s more. We have partnered with several R&D lenders to help you pre-finance expected refunds. You can read more below.

PwC Nifty Pricing, for claims above $200k R&D spend

Catalyst Solutions pricing for claims up to $200k R&D spend

This top-tier backed approach suits many of our clients but not all, especially when first starting out and, frankly, sometimes it’s just about what you can afford. We get that.

So, we’ve also partnered with a smaller independent R&D firm, Catalyst Solutions for a more guided approach that may better suit clients with a small R&D spend.

All prices exclude GST

We charge our R&D claim preparation fee when your claim is ready to lodge with AusIndustry, as set out in our Terms & Conditions. You can read more about our transparent charging philosophy here. The Nifty grants option includes ‘no success no fee’ so on the rare occasion that AusIndustry rejects a claim, we will refund our fees within 14 days.

If we’re already doing your bookkeeping, payroll and tax, we will have the information we need to support an R&D claim but there is work involved in preparing the claim and our service cost reflects that.

It’s worth noting that you can only access an R&D tax incentive refund if your tax return includes an R&D schedule, and preparing a company tax return is charged separately.

Preparing your R&D claim

When preparing a claim you need to be able to show that:

  • You are undertaking innovative, unique, non-trivial software or hardware development
  • You have undertaken a series of experiments with unknown outcomes

It’s worth noting that R&D is an extension of Australia’s tax system, so any claims are subject to potential audits. If you’re one of our Launch, Go or Grow bookkeeping clients, you will be in a good position for these because you’ll be using the Receipt Bank App/email to submit invoices, receipts and expenses so they’ll all be digitally ready to go for auditors.

Want the official view?  Visit the official AusIndustry R&D tax incentive website.

R&D Financing

Additional Service

We work with several R&D lenders on forward funding R&D tax incentive claims in Australia.

If you’re a startup looking to raise capital, this is a particularly attractive service. It works on the principle that most capital being raised will be used to fund further development, which is likely to be eligible for future R&D claims. Therefore, you can use R&D forward funding, as debt. This means you can either accelerate your R&D work and/or reduce the amount of capital you would otherwise have needed to raise. And as a founder, clever use of R&D forward funding means you get to keep more equity in your startup.

Our lenders specialises in providing loans against expected R&D tax refunds. If you have already done a previous R&D tax incentive claim, you’ll usually have most of the information needed to streamline the process of accessing this funding, but it is also available to first year R&D claimants subject to some extra rigour.

You’ll also need a forward cashflow, which we can help with as part of our financial modelling services.

We help businesses grow