With the R&D Tax Incentive deadline fast approaching, we understand that many businesses can start to feel the pressure to ensure they are maximising their R&D claims, which can cause many questions to arise. At Rimon Advisory, our R&D tax specialists want to help make sure you get the best returns with minimum stress, so we have compiled a quick breakdown of the common questions that we are constantly asked, including:
2. What is the process from start to finish?
4. Are overseas developers claimable?
5. Can I claim Rent and Utilities?
What is Considered R&D?
R&D is based on people having innovative ideas that lead them on a process of experimentation and uncertainty, resulting in the development of a unique product or service. This often requires an identification of the new knowledge that is being generated by the R&D activity.
You can check your business’s eligibility for the R&D tax incentive here.
What is the process from start to finish?
The R&D tax incentive follows a clear process for stress-free claims. In order to complete the R&D tax incentive application, there are two necessary ingredients:
1. Technical Report that details the R&D activities
2. Breakdown of all the R&D expenses
This information is submitted to AusIndustry, who subsequently provide a registration number after 7-10 working days. Once this is received, an R&D Tax Schedule is prepared to be filed with your tax return. After approximately 4-6 weeks, the applicant will either receive their cash back benefit (if the company made a loss) or tax savings (if the company made a profit).
Can I claim salaries?
Salary amounts for all staff members involved in the R&D process are claimable. For example, if the CEO spends 10% of his time on eligible R&D management and gets paid $100,000 per annum, the claimable amount is $10,000. The same logic applies for all tech developers, R&D administrators and those involved in the experimentation process.
*The amounts claimed need to be verifiable via technical records and other methodical means.
Are overseas developers claimable?
All payments to developers who work in Australia and are doing eligible R&D could be claimable. However, if the developer is located overseas, these payments are not claimable. Nevertheless, if the resources for the activity are located overseas, it is possible to undertake an overseas finding.
Can I claim rent and utilities?
Additional eligible expenses are claimable on the condition that they were involved in the R&D process. For example, rent and utilities are claimable as they are required to undertake the R&D activities. These expenses are ultimately apportioned based on appropriate methodologies.
Other overheads may be eligible, and this is assessed on a case-by-case basis.
Steps to Take
It’s important to move quickly with your R&D tax incentive application with the April deadline.
Make sure that you give our R&D tax specialists at Rimon Advisory email info@rimon.com.au if you have any further questions or to discuss if you are eligible.
