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
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.