Government Grants for Australian Startups
The Biggest Barrier to a Successful Startup is access to Cash
Rimon Advisory are leaders in assisting tech companies access Funding through the R&D Tax Incentive
R&D Tax Incentive and Export Market Development Grant Experts
The R&D Tax Incentive for Startups:
Startups, by nature, are incurring development costs but at the same time bringing in little or no revenue. This is the reason that tech startups, as opposed to other early stage types of companies, are continuously raising capital.
The R&D Tax Grant allows companies performing research and development to turn your R&D eligible spend into real cash. This cash then lengthens your runway, allows you to keep kicking and swimming for longer, before needing to raise capital.
How Does Startup Funding Work?
To put it simply, the R&D tax offset is giving an innovative company the ability to “dip into” their tax losses today rather than wait to use them one day in the future when they are profitable.
A company is turning their tax losses into cash.
In other words:
Dev costs + Small or Zero Revenue = Tax Losses
Tax Losses + R&D Tax Incentive = Cash in the bank
The refundable benefit is 43.5% of your eligible R&D spend.*
Have a look at the calculator on the right to see some examples of how it works.
Total R&D Spend
Your R&D Cash Back Benefit*
Startup Funding Simplified.
If you are investing time and money into developing new knowledge and innovation, your business may be eligible to recover up to 43.5% of your eligible R&D costs in the form of cash. The benefit is your business' to keep - no need for your business to pay it back or sacrifice any equity.
Watch this quick video
R&D Tax Incentive Regulators
There are 2 regulators that regulate the R&D tax incentive.
Australian Government Business
- Governing the actual technical R&D that is being put forward
- The underlying R&D activities that occurred
The Australian Tax Office (ATO)
- The financial side of things - ensuring compliance over the R&D expenditure being claimed and that it meets the R&D regulations
Submitting a Claim - The Process.
There are 2 separate submissions to each of the governing bodies mentioned above.
AusIndustry ( Government Business)
- A technical report is required identifying precisely what the R&D activities were for the preceding financial year
- Software is the trickiest of all the R&D disciplines and requires a true understanding of the incentive in order to submit a report that both showcases the depth and complexity of your R&D activities but at the same time explains the project in a manner that is understandable to a non expert. (Rimon Advisory are master craftsmen in this report writing skill)
- The technical submission is done via a smartform and the deadline of the submission is 10 months post a company’s financial year end
- The ATO governs the financial side of the incentive
- This skill requires taking the technical activities and attributing $ values to them using the financial statements of the R&D company
- These figures are finalised in what is known as a R&D Tax Incentive Schedule
- The schedule is included in a company's tax return and the tax return is submitted to the ATO
Here is a quick summary of how submission works:
To ensure the company meets the eligibility criteria and that the possible benefit of a claim outweighs the required effort.
A submission is made to Ausindustry to formally register the claim.
Income Tax Return
Tax schedule is prepared. The company's accountant needs to include the schedule in the company's annual tax return.
Receive Tax Offset
The net benefit will vary depending on the size of the claim and on the company's profit/loss.
Benefits of Applying for Startup Funding
The Benefits of Applying for the Cash Refundable RDTI:
These are some of the benefits of using the R&D Tax Incentive:
- Access to cash
- The funding is non dilutive (no equity is given for the cash)
- The funding is not debt (it is not a loan and the company does not need to pay it back to the ATO if the claim is submitted according to the compliance and law provided)
- Increased runway (more cash to last your startup longer)
- More time to increase company valuation before raising capital
- The longer you can develop and build before raising capital the higher the chances of an increased valuation
The Rimon Advisory Difference
Our very specific difference in the software and technology space is that we intrinsically understand software and IT.
We have a team of experienced engineers and computer scientists with experience writing thousands of software and IT technical reports.
We have the ability to understand your R&D project and then take that understanding and craft a technical report that will showcase your R&D project and be the right level of reading for the government body.
What We Do.
At Rimon we focus on 4 main areas when it comes to working with you on your R&D Tax Incentive and Export Market Development Grant claims:
- We make it Our Business to make Your Business Compliant
- The R&D Tax Incentive and EMDG are what we do, and we do them well
- Our technical and financial experts are the top of the game
- We do the work, so you can run your business
- We are a full-service outfit
- Expect efficiency and accuracy when working with the Rimon Team
- Each business is different and has its own magic
- Our expert team take the time to understand Your Magic
- We deliver to Your specific needs and requirements
- Life is short, enjoy it
- Work with a team that you have fun with
- We are just as excited to work with you
Common Startup Funding Questions
Your start could receive 43.5% back in cash of their eligible R&D spend
- The grant is cashflow to help your business grow.
- It is not payable back to the government as long as a true eligible claim is submitted. It is also not debt or equity.
- Rimon Advisory are expert specialists in R&D IT eligibility regarding software innovation.
- We have groomed a technical team made up of engineers and computer scientists who are able to understand your R&D and transform it into a written story that will meet the government’s compliance and regulations.
- We then have a financial team that are able to work in tandem with our technical team to attribute the compliant and correct financial value to your R&D.